rcuitTown commenced a gift card program in January 2024 and sold $13,900 of gift cards in January, $18,700 in February, and $20,450 in March 2024 before discontinuing further gift card sales. During 2024, gift card redemptions were $8,500 for the January gift cards sold, $5,100 for the February cards, and $6,050 for the March cards. CircuitTown considers gift cards to be “broken” (not redeemable) 10 months after sale. Required: How much revenue will CircuitTown recognize with respect to January gift card sales during 2024? Prepare journal entries to record the sale of January gift cards, redemption of gift cards (ignore sales tax), and breakage (expiration) of gift cards. How much revenue will CircuitTown recognize with respect to March gift card sales during 2024? What liability for deferred revenue associated with gift card sales would CircuitTown show as of December 31, 2024?
rcuitTown commenced a gift card program in January 2024 and sold $13,900 of gift cards in January, $18,700 in February, and $20,450 in March 2024 before discontinuing further gift card sales. During 2024, gift card redemptions were $8,500 for the January gift cards sold, $5,100 for the February cards, and $6,050 for the March cards. CircuitTown considers gift cards to be “broken” (not redeemable) 10 months after sale. Required: How much revenue will CircuitTown recognize with respect to January gift card sales during 2024? Prepare journal entries to record the sale of January gift cards, redemption of gift cards (ignore sales tax), and breakage (expiration) of gift cards. How much revenue will CircuitTown recognize with respect to March gift card sales during 2024? What liability for deferred revenue associated with gift card sales would CircuitTown show as of December 31, 2024?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
CircuitTown commenced a gift card program in January 2024 and sold $13,900 of gift cards in January, $18,700 in February, and $20,450 in March 2024 before discontinuing further gift card sales. During 2024, gift card redemptions were $8,500 for the January gift cards sold, $5,100 for the February cards, and $6,050 for the March cards. CircuitTown considers gift cards to be “broken” (not redeemable) 10 months after sale.
Required:
- How much revenue will CircuitTown recognize with respect to January gift card sales during 2024?
- Prepare
journal entries to record the sale of January gift cards, redemption of gift cards (ignore sales tax), and breakage (expiration) of gift cards. - How much revenue will CircuitTown recognize with respect to March gift card sales during 2024?
- What liability for deferred revenue associated with gift card sales would CircuitTown show as of December 31, 2024?
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