Please help with accounting work, fill the Credit Card Customer Mini Case.
Credit Card Customer Mini Case (due with HW #1) You sign up for a credit card with Chase (a credit card financing company), which gives you 1 point for each dollar purchased from merchants when using the credit card. These points may be accumulated and redeemed for cash or a number of different goods and services. Chase also enters into arrangements with merchants. Under these agreements Chase provides the financing for the transaction between the merchant and the credit card user, in return for which Chase receives a stated fee from the merchant. When you use your Chase credit card to make a purchase from a merchant, Chase pays the merchant the funding for the amount of the transaction after deducting the fee that Chase is entitled to collect. However, as a result of that transaction, Chase now also has an obligation to you to provide a specified number of points. Furthermore, Chase can charge you interest if you maintain a balance on your credit card and do not pay it off each month. Chase can also charge you $30 for a late payment. The credit card also charges you an annual fee of $100 to maintain the card, but provides free insurance coverage on rental cars for cardholders. Answer the following questions referring to the Transition Resource Group memo on Canvas (you can ignore the Appendices). Questions: (1) Identify the various revenue streams from these contracts. How are the revenue streams different from performance obligations? (2) In your opinion, should these arrangements be considered one or two contracts? (3) Which of these parties are the customer(s) of the credit card company? (4) For the revenue streams identified in (1), which are in the scope of the new revenue recognition standard (Topic 606)? If it is not in the scope of the new standard, which ASC topic applies? (5) Just like credit card companies, airlines also have rewards programs. Rewards programs for airlines are in scope of the new standard. If the reward programs are not considered a performance obligation for credit card companies, what problems might arise given this