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A large clothing retailer chain, Koll's, offers a sales incentive program where customers receive direct...

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Accounting

A large clothing retailer chain, Koll's, offers a sales incentive program where customers receive direct credit toward future purchases based upon the dollar amount of purchases today. For every $50 spent today, the customer will earn a $6 credit to be used at Koll's in two weeks. The credit expires 5 days after it becomes active.-Not all customers will redeem the credit in the 5-day window of time. Based upon historical trends, Koll's estimates that 35% of the credits will be redeemed.
a. Determine how many performance obligations are included in a sales transaction during the sales incentive program.
b. Assuming that Koll's sold $425,000 of merchandise (cost of $170,000) during the first day of the sales incentive period and 8,500, $6 credits were given, record the journal entry(ies) to record sales revenue. Assume all sales were cash sales.
Note: Carry all decimals in calculations; round the final answer to the nearest dollar.
\table[[\table[[Performance],[Obligations]],,\table[[iction],[ce],[ated]],,\table[[Standalone],[Selling],[Price]],\table[[Total Allocated],[Transaction Price],[(rounded)]]],[Merchandise,$,425,000vv,$,425,000vv,407,869vv
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