Reference no: EM131349181
On May 1, 2016, Meta Computer, Inc., enters into a contract to sell 5,500 units of Comfort Office Keyboard to one of its clients, Bionics, Inc., at a fixed price of $94,600, to be settled by a cash payment on May 1. Delivery is scheduled for June 1, 2016. As part of the contract, the seller offers a 25% discount coupon to Bionics for any purchases in the next six months. The seller will continue to offer a 5% discount on all sales during the same time period, which will be available to all customers. Based on experience, Meta Computer estimates a 50% probability that Bionics will redeem the 25% discount voucher, and that the coupon will be applied to $44,000 of purchases. The stand-alone selling price for the Comfort Office Keyboard is $19.20 per unit.
Requirement 1. How many performance obligations are in this contract?
Answer: 2
Requirement 2. Prepare the journal entry that Meta would record on May 1, 2016.
Cash 94,600
Deferred Revenue-Keyboards
Deferred Revenue-Discount Options
Requirement 3. Prepare the journal entry that Meta would record on May 1, 2016. Assume the same facts and circumstances as above, except that Meta gives a 5% discount option to Bionics instead of 25%.
Cash
Deferred Revenue-Keyboards
|
Dollar return on this investment over the past year
: Suppose you bought a 6 percent coupon bond one year ago for $950. The bond sells for $995 today. Assuming a $1,000 face value, what was your total dollar return on this investment over the past year? What was your total nominal rate of return on this..
|
|
Average real return on crash-n-burn stock
: You’ve observed the following returns on Crash-n-Burn Computer’s stock over the past five years: 5 percent, -14 percent, 26 percent, 22 percent, and 16 percent. The average inflation rate over this period was 3.2 percent and the average T-bill rate w..
|
|
Estimate the current market value of debt and equity
: Hugo Boss AG is a German luxury fashion and style house that is examining its financing policy for possible changes. The firm has 8-year coupon bonds outstanding with a face value of $ 400 million and interest expenses of $18.0 million a year. Estima..
|
|
Calculate annual cash flows from fixed payment annuity
: Calculate the annual cash flows (annuity payments) from a fixed-payment annuity if the present value of the 20-year annuity is $1.4 million and the annuity earns a guaranteed annual return of 10 percent. The payments are to begin at the end of the cu..
|
|
How many performance obligations are in this contract
: On May 1, 2016, Meta Computer, Inc., enters into a contract to sell 5,500 units of Comfort Office Keyboard to one of its clients, Bionics, Inc., at a fixed price of $94,600, to be settled by a cash payment on May 1. How many performance obligations a..
|
|
What is firm cost of preferred stock
: Grill Works and More has 5 percent preferred stock outstanding that is currently selling for $57 a share. The stock's par value is $100. The market rate of return is 7 percent and the firm's tax rate is 34 percent. What is the firm's cost of preferre..
|
|
Bonds make semiannual payments-common stock
: Consider the following information for Evenflow Power Co., Debt: 3,500 8 percent coupon bonds outstanding, $1,000 par value, 22 years to maturity, selling for 102 percent of par; the bonds make semiannual payments. Common stock: 84,000 shares outstan..
|
|
Descriptive analysis of the statistical moments
: Provide a written descriptive analysis of the statistical moments. For example; the first, second, third, fourth, etc. Be sure to include the cumulants and L-moments. You do not need to include the equations.
|
|
The end of ten years using the gordon growth model
: An analyst is expected to have earnings in ten years of €12 per share, a dividend payout ratio of 50%, and a required return of 11%. At that time, the dividend growth rate is expected to fall to 4% in perpetuity. Estimate the terminal value at the en..
|