Mimay Store sells gift certificates redeemable for store merchandise. The certificates expire one year after their issuance. Mimay has the following information pertaining to its gift certificates sales and redemptions: Unearned on December 31, 2005                        600,000            2006 sales                                                          2,000,000            2006 redemptions of prior-year sales                    200,000            2006 redemptions of current-year sales             1,400,000   Mimay's experience indicates that 10% of gift certificates sold will not be redeemed. Mimay uses PFRS 15. In its December 31, 2006 statement of profit or loss, what amount should Mimay report as total revenue relating to gift certificates?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Mimay Store sells gift certificates redeemable for store merchandise. The certificates expire one year after their issuance. Mimay has the following information pertaining to its gift certificates sales and redemptions:

Unearned on December 31, 2005                        600,000

           2006 sales                                                          2,000,000

           2006 redemptions of prior-year sales                    200,000

           2006 redemptions of current-year sales             1,400,000

 

Mimay's experience indicates that 10% of gift certificates sold will not be redeemed. Mimay uses PFRS 15. In its December 31, 2006 statement of profit or loss, what amount should Mimay report as total revenue relating to gift certificates?

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