HomeworkLib
Question

ClipClop Company sells horseshoes to customers at a discount of 4% if the customer orders more...

ClipClop Company sells horseshoes to customers at a discount of 4% if the customer orders more than 10,000 horseshoes in a year. The price per shoe is $2. In April, Oats Company orders 4,000 horseshoes from ClipClop. Based on past experience with Oats Company, ClipClop expects Oats to meet the volume threshold of 10,000 horseshoes by the end of the year. What amount of revenue should ClipClop record in connection with the April sale?

$8,000

$0 because ClipClop does not know if Oats will meet the volume discount threshold

$7,680

$20,000

business   accounting   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

As the target of 10000shoes are expected to be met by year end

clipclop company would record discounted price as revenue

if the target is not achieved by year end it will reverse the discount effect by crediting sales discount forfeited account.

=4000*$2

=8000

discount = 8000*4%

=320$

sales reveneu = sales- discount

=8000-320

=7680$

1 0
Add a comment
Know the answer?
Add Answer to:
ClipClop Company sells horseshoes to customers at a discount of 4% if the customer orders more...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • Merritt Equipment Company sells computers for $1,500 each and also gives each customer a 1-year warranty...

    Merritt Equipment Company sells computers for $1,500 each and also gives each customer a 1-year warranty that requires the company to perform periodic services and to replace defective parts. During 2020, the company sold 1,200 computers. Based on past experience, the company has estimated the total warranty costs as $40 for parts and $60 for labor per unit. In 2020, Merritt incurred actual warranty costs of $8,000 for parts and $12,000 for labor. In 2021, Merritt incurred actual warranty costs...

  • This year, Lambert Company will ship 1,500,000 pounds of goods to customers at a cost of...

    This year, Lambert Company will ship 1,500,000 pounds of goods to customers at a cost of $1,200,000. If a customer orders 10,000 pounds and produces $200,000 of revenue (total revenue is $20 million), the amount of shipping cost assigned to the customer by using ABC would be a. unable to be determined. b. $8,000 ($0.80 per pound shipped). c. $24,000 (2% of the shipping cost). d. $12,000 (1% of the shipping cost). e. None of these.

  • ailer, sells boots in different styles. In early November the company starts selling "SunBoots"' to customers...

    ailer, sells boots in different styles. In early November the company starts selling "SunBoots"' to customers for $65 per pair. When a customer purchases a pair of SunBoots, Clarks future purchases made in the next 30 days. Customers can't obtain the discount coupon otherwise. Clarks anticipates that approximately 20% of customers will utilize the coupon, and that on average those customers will purchase normally sell for $120. also give s the customer a 30% discount coupon for any additional additional...

  • Exercise 6-6 (Algo) Performance obligations; customer option for additional goods or services [LO6-2, 6- 4, 6-5)...

    Exercise 6-6 (Algo) Performance obligations; customer option for additional goods or services [LO6-2, 6- 4, 6-5) Clarks Inc. a shoe retailer, sells boots in different styles. In early November the company starts selling "SunBoots" to customers for S70 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 can't obtain the discount coupon otherwise. Clarks anticipates that approximately 20%...

  • Merritt Equipment Company sells computers for $1,220 each and also gives each customer a 2-year warranty that requires t...

    Merritt Equipment Company sells computers for $1,220 each and also gives each customer a 2-year warranty that requires the company to perform periodic services and to replace defective parts. During 2017, the company sold 950 computers. Based on past experience, the company has estimated the total 2-year warranty costs as $40 for parts and $60 for labor. (Assume sales all occur at December 31, 2017.) In 2018, Merritt incurred actual warranty costs relative to 2017 computer sales of $10,000 for...

  • Question 4 (1 point) Wizard Corporation has analyzed their customer and order handling data for the...

    Question 4 (1 point) Wizard Corporation has analyzed their customer and order handling data for the past year and has determined the following costs: Order processing cost per order $7 Additional costs if order must be expedited (rushed) $8.00 Customer technical support calls (per call) $12 Relationship management costs (per customer per year) $1200 In addition to these costs, product costs amount to 75% of Sales. In the prior year, Wizard had the following experience with one of its customers,...

  • Clarks Inc., a shoe retailer, sells boots in different styles. In early November the company starts...

    Clarks Inc., a shoe retailer, sells boots in different styles. In early November the company starts selling "SunBoots" 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 can't 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...

  • Jacks sales sells photocopiers and provides parts and services to its customers. The company has 30...

    Jacks sales sells photocopiers and provides parts and services to its customers. The company has 30 employees and provide employees with a benefit plan. You are the controller and are looking at the liability section of the balance sheet and have identified several areas for consideration. For each of the areas answer the related questions assuming private entity GAAP is used. Indicate how your answer would be different if the company used IFRS. As part of a promotion in the...

  • Suppose Jones Company has orders from three customers located in the same market area. One order...

    Suppose Jones Company has orders from three customers located in the same market area. One order has a total weight of 4,300 pounds, the second weighs 9,000 pounds, and the third weighs 12,800 pounds. The transportation carrier quotes a freight rate of $18 per hundredweight (or cwt.) for direct shipment to the customer for shipments weighing 1,000 to 4,999 pounds, $16 per cwt. for orders weighing 5,000 to 9,999 pounds, and $14 for shipments weighing between 10,000 and 15,000 pounds....

  • External Linkages, Customer Costing, Customer Profitability Emery Company sells small machine parts to heavy equipment manufacturers...

    External Linkages, Customer Costing, Customer Profitability Emery Company sells small machine parts to heavy equipment manufacturers for an average price of $1.05 per part. There are two types of customers: those who place small, frequent orders and those who place larger, less frequent orders. Each time an order is placed and processed, a setup is required. Scheduling is also needed to coordinate the many different orders that come in and place demands on the plant's manufacturing resources. Emery also inspects...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT