During December 2023, Carla Vista Ltd. sells $22,500 of gift cards to customers. From reliable past experience, management estimates that 7% of the gift cards sold will not be redeemed by customers. In January 2024, $2,100 of these cards is redeemed for merchandise with a cost of $1,575. In February 2024, a further $10,800 of these cards is redeemed for merchandise with a cost of $8,640. The company uses a perpetual inventory system and has a February 28 year end.
During December 2023, Carla Vista Ltd. sells $22,500 of gift cards to customers. From reliable past experience, management estimates that 7% of the gift cards sold will not be redeemed by customers. In January 2024, $2,100 of these cards is redeemed for merchandise with a cost of $1,575. In February 2024, a further $10,800 of these cards is redeemed for merchandise with a cost of $8,640. The company uses a perpetual inventory system and has a February 28 year end.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:During December 2023, Carla Vista Ltd. sells $22,500 of gift cards to customers. From reliable past experience, management
estimates that 7% of the gift cards sold will not be redeemed by customers. In January 2024, $2,100 of these cards is redeemed for
merchandise with a cost of $1,575. In February 2024, a further $10,800 of these cards is redeemed for merchandise with a cost of
$8,640. The company uses a perpetual inventory system and has a February 28 year end.
(a)
Prepare the journal entry needed for December 2023. (Credit account titles are automatically indented when the amount is
entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List debit entry
before credit entry.)
Date
December, 2023
Account Titles and Explanation
Debit
Credit
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