A New York City daily newspaper called “Manhattan Today” charges an annual subscription fee

of $594. Customers prepay their subscriptions and receive 290 issues over the year. To attract
more subscribers, the company offered new subscribers the ability to pay $560 for an annual
subscription that also would include a coupon to receive a 40% discount on a one-hour ride
through Central Park in a horse-drawn carriage. The list price of a carriage ride is $550 per hour.
The company estimates that approximately 30% of the coupons will be redeemed.
1. How much revenue should Manhattan Today recognize upon receipt of the $560
subscription price?

2. How many performance obligations exist in this contract?

3. Prepare the journal entry to recognize sale of 11 new subscriptions, clearly identifying
the revenue or deferred revenue associated with each performance obligation.
Prepare the journal entry for the transaction.

Presume the same facts, but an explicit interest rate of 10% - Treat as an installment note.
Prepare the journal entries for the sale and advertising.

Prepare the journal entry.

Prepare the journal entry.

Prepare the journal entry.
Prepare the journal entry using the adjusted market price approach.

Prepare the journal entry using the cost plus margin approach.

Prepare the journal entry using the residual approach.

Prepare the journal entry to record the sale of 100,000 Protab Packages.

Orange Inc. offers a discount coupon for an extended warranty as part of a package sold with the oPhone.
The warranty normally has a price of $150, but the coupon provides a $30 discount. Orange anticipates
that there is a 75% chance that a customer will redeem the coupon. The oPhone sells separately for $400,
and as part of a promotion, sells the phone and discount offer for $410. Prepare the journal entry for the
sale of 1,000 packages.
On December 1, Zebra, Inc. received a purchase order and agreed to manufacture one million compact
disc storage containers for Barbizon Unlimited. Under the terms of the contract, Barbizon will pay Zebra
total of $80,000 for these containers. Barbizon can cancel the contract if it so chooses but must pay
Zebra for work completed to date. However, Zebra believes that even if Barbizon did cancel the
contract, they could still sell the containers to another company and still make a profit. Zebra expects to
deliver the products on February 1, and as of December 31, the job is 50% complete. The cost of the
completed containers is expected to be $40,000. Prepare any appropriate entries as of December 31.