Question

"Aria Perfume, Inc., sold 3,210 boxes of white musk soap during January of 2021 at the price of $90 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 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?"

Answer 1

The amount of revenue recognize in January is $280,233.

Step-by-step explanation:

Sales price = Number of boxes sold * Selling price per box

= 3,210 boxes * $90

= $288,900

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Sales return = Sales price * % of sales return

= $288,900 * 3%

= $8,667

Revenue recognized in January = Sales price - Sales return

= $288,900 - $8,667

= $280,233

Hence, the amount of revenue recognize in January is $280,233.