A customer purchases a pair of sunboots

Reference no: EM131123097

Clarks Inc., a shoe retailer, sells boots in different styles. In early November the company starts selling Ac€A? SunBootsAc€? to customers for $70 per pair. When a customer purchases a pair of SunBoots, Clarks also gives the customer a 30% discount coupon for any additional future purchases made in the next 30 days. Customers canAc€?ct obtain the discount coupon otherwise. Clarks anticipates that approximately 20% of customers will utilize the coupon, and that on average those customers will purchase additional goods that normally sell for $100.

Required:

1. How many performance obligations are in a contract to buy a pair of SunBoots?

2. Prepare a journal entry to record revenue for the sale of 1,000 pairs of SunBoots, assuming that Clarks uses the residual method to estimate the stand-alone selling price of SunBoots sold without the discount coupon. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Reference no: EM131123097

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