On day one, you gave a gift certificate from Chewy to your dog trainer. You paid $75 for the gift certificate. Chewy’s experience is that, on average, 10 percent of the value of a gift certificate is not redeemed (i.e. 90% is redeemed). On day 20, your dog trainer used the certificate to purchase $40 of dog toys from Chewy. How much revenue should Chewy recognize on day one and day 20: Group of answer choices $67.50 on day one and $7.50 on day 20. $75 on day one. Zero on day one and $40 on day 20. Zero on day one and $44.44 on day 20. Zero on day one and $67.50 on day 20.
On day one, you gave a gift certificate from Chewy to your dog trainer. You paid $75 for the gift certificate. Chewy’s experience is that, on average, 10 percent of the value of a gift certificate is not redeemed (i.e. 90% is redeemed). On day 20, your dog trainer used the certificate to purchase $40 of dog toys from Chewy. How much revenue should Chewy recognize on day one and day 20: Group of answer choices $67.50 on day one and $7.50 on day 20. $75 on day one. Zero on day one and $40 on day 20. Zero on day one and $44.44 on day 20. Zero on day one and $67.50 on day 20.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On day one, you gave a gift certificate from Chewy to your dog trainer. You paid $75 for the gift certificate. Chewy’s experience is that, on average, 10 percent of the value of a gift certificate is not redeemed (i.e. 90% is redeemed). On day 20, your dog trainer used the certificate to purchase $40 of dog toys from Chewy. How much revenue should Chewy recognize on day one and day 20: Group of answer choices $67.50 on day one and $7.50 on day 20. $75 on day one. Zero on day one and $40 on day 20. Zero on day one and $44.44 on day 20. Zero on day one and $67.50 on day 20.
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