Dynasty Company sells gift certificates redeemable only when merchandise is purchased. Upon redemption, Dynasty Company recognizes the unearned revenue as realized. Information for 2019 is as follows: Unearned Revenue, January 1, 2019 P650,000; Gift certificates sold P2,250,000; Gift certificates redeemed P1,950,000; Gift certificates unredeemed for a long time P100,000; Cost of Goods Sold 60%. What amount should be reported as Unearned Revenue on December 31, 2019, following the ruling by the Department of Trade and Industry that gift certificates no longer have an expiration period?
Dynasty Company sells gift certificates redeemable only when merchandise is purchased. Upon redemption, Dynasty Company recognizes the unearned revenue as realized. Information for 2019 is as follows: Unearned Revenue, January 1, 2019 P650,000; Gift certificates sold P2,250,000; Gift certificates redeemed P1,950,000; Gift certificates unredeemed for a long time P100,000; Cost of Goods Sold 60%. What amount should be reported as Unearned Revenue on December 31, 2019, following the ruling by the Department of Trade and Industry that gift certificates no longer have an expiration period?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Dynasty Company sells gift certificates redeemable only when
merchandise is purchased. Upon redemption, Dynasty Company
recognizes the unearned revenue as realized. Information for 2019 is as
follows: Unearned Revenue, January 1, 2019 P650,000; Gift certificates
sold P2,250,000; Gift certificates redeemed P1,950,000; Gift certificates
unredeemed for a long time P100,000; Cost of Goods Sold 60%. What
amount should be reported as Unearned Revenue on December 31, 2019,
following the ruling by the Department of Trade and Industry that gift
certificates no longer have an expiration period?
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