Solved: Determine the refund amount, Accounting Basics

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Determine the refund amount

Performance obligations; right of return

Response to the following problem:

Aria Perfume, Inc., sold 3,210 boxes of white musk soap during January of 2016 at the price of $90 per box. The company offers a full refund for any product returned within 30 days from the date of purchase. Based on historical experience, Aria expects that 3% of sales will be returned. How many performance obligations are there in each sale of a box of soap? How much revenue should Aria recognize in January?

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Accounting Basics: Determine the refund amount

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Accounting Basics: Determine the refund amount

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