Business, 06.08.2019 20:20 briannagiddens
The ole factory, inc. sells scented beauty products and personal care items. it is currently offering a promotion in conjunction with the launch of its new consulting business: customers can purchase a deluxe beauty kit for $500, which is the normal retail price for this item, plus get one month's free access to an online beauty consultant, which normally costs $40 per month. for each deluxe beauty kit sold as part of this promotion, how much revenue and deferred revenue should the ole factory recognize at the time of sale and how should it be allocated?
a. $500 total revenue, allocated $460 to the kit and $40 to the service.
b. $500 total revenue, allocated $463 to the kit and $37 to the service.
c. $500 total revenue, allocated $460 to the kit and $40 to the service. deferred revenue of $240 recorded.
d. $500 total revenue, allocated entirely to the kit. deferred revenue of $240 recorded.
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