ook ht nces Supply Club, Incorporated, sells a variety of paper products, office supplies, and other products used by businesses and individual consumers. During July 2024, it started a loyalty program through which qualifying customers can accumulate points and redeem those points for discounts on future purchases, Redemption of a loyalty point reduces the price of one dollar of future purchases by 20% (equal to 20 cents). Customers do not earn additional loyalty points for purchases on which loyalty points are redeemed. Based on past experience, Supply Club estimates a 60% probability that any point issued will be redeemed for the discount. During July 2021, the company redeemed 12,400 points and sold additional product of $155,000, so it recorded $167,400 of revenue. The aggregate stand-alone selling price of the purchased products is $167,400. Eighty percent of sales were cash sales, and the remainder were credit sales Required: 1. & 2. Prepare Supply Club's journal entry to record July and August sales. During August, customers redeem loyalty points on $74,400 of merchandise. Seventy-five percent of those sales were for cash, and the remainder were credit sales Note: Do not round intermediate calculations. If no entry is required for a transaction/event, select "No journal entry required" in the first account field. View transaction list Journal entry worksheet Record the July sales. Note: Enter debits before credits. Transaction General Journal Cash Accounts receivable Deferred revenue-loyalty points Sales revenue < Prev Debit 3 of 15 Credit Next >
ook ht nces Supply Club, Incorporated, sells a variety of paper products, office supplies, and other products used by businesses and individual consumers. During July 2024, it started a loyalty program through which qualifying customers can accumulate points and redeem those points for discounts on future purchases, Redemption of a loyalty point reduces the price of one dollar of future purchases by 20% (equal to 20 cents). Customers do not earn additional loyalty points for purchases on which loyalty points are redeemed. Based on past experience, Supply Club estimates a 60% probability that any point issued will be redeemed for the discount. During July 2021, the company redeemed 12,400 points and sold additional product of $155,000, so it recorded $167,400 of revenue. The aggregate stand-alone selling price of the purchased products is $167,400. Eighty percent of sales were cash sales, and the remainder were credit sales Required: 1. & 2. Prepare Supply Club's journal entry to record July and August sales. During August, customers redeem loyalty points on $74,400 of merchandise. Seventy-five percent of those sales were for cash, and the remainder were credit sales Note: Do not round intermediate calculations. If no entry is required for a transaction/event, select "No journal entry required" in the first account field. View transaction list Journal entry worksheet Record the July sales. Note: Enter debits before credits. Transaction General Journal Cash Accounts receivable Deferred revenue-loyalty points Sales revenue < Prev Debit 3 of 15 Credit Next >
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question

Transcribed Image Text:ook
ne
nces
Supply Club, Incorporated, sells a variety of paper products, office supplies, and other products used by businesses and individual
consumers. During July 2024, it started a loyalty program through which qualifying customers can accumulate points and redeem
those points for discounts on future purchases, Redemption of a loyalty point reduces the price of one dollar of future purchases by
20% (equal to 20 cents) Customers do not earn additional loyalty points for purchases on which loyalty points are redeemed. Based
on past experience, Supply Club estimates a 60% probability that any point issued will be redeemed for the discount. During July
2021, the company redeemed 12,400 points and sold additional product of $155,000, so it recorded $167,400 of revenue. The
aggregate stand-alone selling price of the purchased products is $167,400. Eighty percent of sales were cash sales, and the remainder
were credit sales
Required:
1. & 2. Prepare Supply Club's journal entry to record July and August sales. During August, customers redeem loyalty points on
$74,400 of merchandise. Seventy-five percent of those sales were for cash, and the remainder were credit sales
Note: Do not round intermediate calculations. If no entry is required for a transaction/event, select "No journal entry required" in
the first account field.
View transaction list
Journal entry worksheet
Record the July sales.
Note: Enter debits before credits.
Transaction
General Journal
Cash
Accounts receivable
Deferred revenue-loyalty points
Sales revenue
< Prev
Debit
3 of 15
Credit
Next >

Transcribed Image Text:pok
nt
nces
1. & 2. Prepare Supply Club's journal entry to record July and August sales. During August, custom
$74,400 of merchandise. Seventy-five percent of those sales were for cash, and the remainder we
Note: Do not round intermediate calculations. If no entry is required for a transaction/event, sel
the first account field.
View transaction list
Journal entry worksheet
<
Record the August sales.
Note: Enter debits before credits.
Transaction
Record entry
General Journal
Clear entry
Debit
Credit
View general journal
Expert Solution

This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps

Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you


Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,

Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,


Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,

Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,

Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON

Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education

Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education