Bull's Eye Department Stores, Inc. records $150,000 in gift card sales and receives cash in year 1. Customers redeemed 20% of the gift cards to purchase merchandise in year 1. The company estimates breakage as 15% and uses the proportional method. How much breakage revenue should be recorded at the end of year 1? (Round any intermediary percentages two decimal places, XXX%. Round your final answer to the nearest dollar.) A. $22,500 B. $5,294 C. $30,000 D. $4,500
Bull's Eye Department Stores, Inc. records $150,000 in gift card sales and receives cash in year 1. Customers redeemed 20% of the gift cards to purchase merchandise in year 1. The company estimates breakage as 15% and uses the proportional method. How much breakage revenue should be recorded at the end of year 1? (Round any intermediary percentages two decimal places, XXX%. Round your final answer to the nearest dollar.) A. $22,500 B. $5,294 C. $30,000 D. $4,500
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
![Bull's Eye Department Stores, Inc. records $150,000 in gift card sales and receives cash in year 1. Customers redeemed 20% of the gift cards to purchase merchandise in year 1. The company estimates
breakage as 15% and uses the proportional method. How much breakage revenue should be recorded at the end of year 1? (Round any intermediary percentages two decimal places, XXX%. Round your final
answer to the nearest dollar.)
A. $22,500
B. $5,294
C. $30,000
D. $4,500](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F87f377c8-556b-40c3-ad73-583aac17d9d0%2Fa139ce3e-8874-41a5-847b-f00d41f41875%2Fxdbhn4t_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Bull's Eye Department Stores, Inc. records $150,000 in gift card sales and receives cash in year 1. Customers redeemed 20% of the gift cards to purchase merchandise in year 1. The company estimates
breakage as 15% and uses the proportional method. How much breakage revenue should be recorded at the end of year 1? (Round any intermediary percentages two decimal places, XXX%. Round your final
answer to the nearest dollar.)
A. $22,500
B. $5,294
C. $30,000
D. $4,500
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