ESSAY. Write your answer in the space provided or on a separate sheet of paper. 40) Ace Sporting Goods is offering the following in-store rewards program as follows. The program runs from January 1, 2025 through December 31, 2025. Rewards are provided on January 1, 2026. Category A. ABCD B. C. D. Purchase Volume Up to $50,000 $50,001-$100,000 $100,001-$200,000 $200,001 and above Rebate 0 1% 2% 5% Sales revenue for 2025 were $10 million, of which 30% fell into Category A, 20% in Category B, 40% in Category C, and 10% in Category D. Rebates provided to customers were $100,000. Ace expects that rewards redeemed will be 95%. What amount should Ace report as a rebate liability at December 31, 2025?
ESSAY. Write your answer in the space provided or on a separate sheet of paper. 40) Ace Sporting Goods is offering the following in-store rewards program as follows. The program runs from January 1, 2025 through December 31, 2025. Rewards are provided on January 1, 2026. Category A. ABCD B. C. D. Purchase Volume Up to $50,000 $50,001-$100,000 $100,001-$200,000 $200,001 and above Rebate 0 1% 2% 5% Sales revenue for 2025 were $10 million, of which 30% fell into Category A, 20% in Category B, 40% in Category C, and 10% in Category D. Rebates provided to customers were $100,000. Ace expects that rewards redeemed will be 95%. What amount should Ace report as a rebate liability at December 31, 2025?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
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Transcribed Image Text:ESSAY. Write your answer in the space provided or on a separate sheet of paper.
40) Ace Sporting Goods is offering the following in-store rewards program as follows. The program runs
from January 1, 2025 through December 31, 2025. Rewards are provided on January 1, 2026.
Category
A.
B.
C.
D.
Purchase Volume
Up to $50,000
$50,001-$100,000
$100,001-$200,000
$200,001 and above
Rebate
0
1%
2%
5%
Sales revenue for 2025 were $10 million, of which 30% fell into Category A, 20% in Category B,
40% in Category C, and 10% in Category D. Rebates provided to customers were $100,000. Ace
expects that rewards redeemed will be 95%.
What amount should Ace report as a rebate liability at December 31, 2025?
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