During February, the last month of the fiscal year, Be My Valentine Ltd. sells $21,400 of gift cards. From experience, managementestimates that 8% of the gift cards sold will not be redeemed by customers. In March, $4,600 of these cards is redeemed formerchandise with a cost of $2,500. In April, further $13,800 of these cards is redeemed for merchandise with a cost of $4,600. Thecompany uses a perpetual inventory system.Also in February, Be My Valentine had $1,000 of unused gift cards that were over one year old and were not expected to be used. Theamount was in line with the company's normal breakage and all other gift cards of the same age had been used.

Here's a breakdown of Be My Valentine Ltd.'s gift card situation:Gift Cards Sold: $21,400Estimated…

Answered: During February, the last month of the…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Neat Logos buys logo-imprinted merchandise and then sells it to university bookstores. Sales are expected to be $2,009,000 in September, $2,250,000 in October, $2,378,000 in November, and $2,560,000 in December. Neat Logos sets its prices to earn an average 30% gross profit on sales revenue. The company does not want inventory to fall below $440,000 plus 10% of the next month's cost of goods sold. Prepare a cost of goods sold, inventory, and purchases budget for the months of October and November.
Merchandise purchases were $43,000 and $76,000 for September and October, respectively. Typically, 20% of total purchases are paid for in the month of purchase with a 5% cash discount. The balance of purchases is paid for (without discount) in the following month.
On January 1, The Parts Store had a $370.000 Inventory at cost. During the first quarter of the year, It purchased $1,510,000 of merchandise, returned $19,100, and pald frelght charges on purchased merchandise totalling $33,600. During the past several years, the store's gross profit on sales has averaged 30%. Under the assumption the store had $1,920,000 of sales during the first quarter of the year, use the gross profit method to estimate its Inventory at the end of the first quarter. Ending inventory
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Nonna's Re-Appliance Store collects 54% of its accounts receivable in the month of sale and 36% in the month after the sale. Given the following sales, how much cash will be collected in February? Round to the nearest penny, two decimal places. Nonna's Re-Appliance Store data Month December January February Sales $21,512 $63,966 $72,252
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Your answer is partially correct. Nash Taco Palace sells 320 gift cards at $60 per gift card and 160 of the gift cards are redeemed by year-end. Nash estimates that it will have 10% breakage on its gift cards. Prepare the entry for the gift card redemption and the expected breakage for the gift cards in the current year. (Ignore Cost of Goods Sold.) (If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. List oll debit entries before credit entries. Round intermediate calculations to 4 decimal places, eg. 0.2456 and final answers to 0 decimal places, eg. 5,125) Account Titles and Explanation Unearned Gift Card Revenue Sales Revenue Sales Revenue (Breakage) eTextbook and Media. Debit Credit 9600
Nonna's Re-Appliance Store collects 52% of its accounts receivable in the month of sale and 37% in the month after the sale. Given the following sales, how much cash will be collected in February? Round to the nearest penny, two decimal places. Month Sales Nonna's Re-Appliance Store data December $20,688 January $62,044 February $69,259

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