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clarks inc a shoe retailer sells boots in different styles in early november the com 4286505


Clarks Inc., a shoe retailer, sells boots in different styles.In early November the company starts selling “SunBoots” tocustomers for $70 per pair. When a customer purchases a pair ofSunBoots, Clarks also gives the customer a 30% discount coupon forany additional future purchases made in the next 30 days. Customerscan’t obtain the discount coupon otherwise. Clarks anticipates thatapproximately 20% of customers will utilize the coupon, and that onaverage those customers will purchase additional goods thatnormally sell for $100.


Prepare a journal entry to record revenue for the sale of 1,000pairs of SunBoots, assuming that Clarks uses the residual method toestimate the stand-alone selling price of SunBoots sold without thediscount coupon. (If no entry is required for atransaction/event, select “No journal entry required” in the firstaccount field.)

Requires you to use the residual approach to allocate thetransaction price.


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