CircuitTown commenced a gift card program in January 2024 and sold $12,900 of gift cards in January, $19,950 in February, and $19,800 in March 2024 before discontinuing further gift card sales. During 2024, gift card redemptions were $8,400 for the January gift cards sold, $5,700 for the February cards, and $5,550 for the March cards. CircuitTown considers gift cards to be “broken” (not redeemable) 10 months after sale. Required: 1. How much revenue will CircuitTown recognize with respect to March gift card sales during 2024? 2. What liability for deferred revenue associated with gift card sales would CircuitTown show as of December 31, 2024?
CircuitTown commenced a gift card program in January 2024 and sold $12,900 of gift cards in January, $19,950 in February, and $19,800 in March 2024 before discontinuing further gift card sales. During 2024, gift card redemptions were $8,400 for the January gift cards sold, $5,700 for the February cards, and $5,550 for the March cards. CircuitTown considers gift cards to be “broken” (not redeemable) 10 months after sale. Required: 1. How much revenue will CircuitTown recognize with respect to March gift card sales during 2024? 2. What liability for deferred revenue associated with gift card sales would CircuitTown show as of December 31, 2024?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
CircuitTown commenced a gift card program in January 2024 and sold $12,900 of gift cards in January, $19,950 in February, and $19,800 in March 2024 before discontinuing further gift card sales. During 2024, gift card redemptions were $8,400 for the January gift cards sold, $5,700 for the February cards, and $5,550 for the March cards. CircuitTown considers gift cards to be “broken” (not redeemable) 10 months after sale.
Required:
1. How much revenue will CircuitTown recognize with respect to March gift card sales during 2024?
2. What liability for deferred revenue associated with gift card sales would CircuitTown show as of December 31, 2024?
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