Answered

Discover a world of knowledge and get your questions answered at IDNLearn.com. Get accurate and detailed answers to your questions from our dedicated community members who are always ready to help.

Aria Perfume, Inc., sold 2,870 boxes of white musk soap during January of 2021 at the price of $80 per box. The company offers a full refund to unsatisfied customers for any product returned within 30 days from the date of purchase. Based on historical experience, Aria expects that 4% of sales will be returned.
How many performance of obligations are there in each sale of a box of soap?
How much revenue should Aria recognize in January?

Sagot :

Abiolataiwo2015idn

Answer:

a. One performance obligation

b. Revenue $220,416

Explanation:

a. Based on the information given the PERFORMANCE OF OBLIGATIONS that are there in each sale of a box of soap is ONE.

b. Calculation to determine How much revenue should Aria recognize in January

Using this formula

Revenue= (Number of boxes sold × Price per box) - (Sales returned percentage ×Number of boxes sold* Price per box)

Let plug in the formula

Revenue=( 2,870 boxes × $80)- (4% × 2,870 boxes × $80)

Revenue= $229,600 - $9,184

Revenue= $220,416

Therefore revenue that Aria should recognize in January is $220,416

Thank you for being part of this discussion. Keep exploring, asking questions, and sharing your insights with the community. Together, we can find the best solutions. Your questions find answers at IDNLearn.com. Thanks for visiting, and come back for more accurate and reliable solutions.