Required: 1. & 2. Prepare Supply Club's journal entry to record July and August sales. During August, customers redeem loyalty points on $61,200 of merchandise. Sixty-five percent of those sales were for cash, 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 $61,200 of merchandise. Sixty-five percent of those sales were for cash, and the remainder were credit sales.
Chapter18: Accounting Periods And Methods
Section: Chapter Questions
Problem 1RP
Related questions
Question
1.Please Complete Solution With Details
2.Final Answer Clearly Mentioned
3.Do not give solution in image format
![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 10,200 points and sold additional product of $127,500, so it
recorded $137,700 of revenue. The aggregate stand-alone selling price of the purchased products is $137,700.
Seventy 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 $61,200 of merchandise. Sixty-five percent of those sales were for cash,
and the remainder were credit sales.
Journal entry worksheet
Note: Enter debits before credits.
Transaction
Journal entry worksheet
Record the August sales.
Note: Enter debits before credits.
2
Transaction
Cash
1
General Journal
General Journal
Cash
Accounts receivable
Sales revenue
Deferred revenue - loyalty points
Accounts receivable
Deferred revenue - loyalty points
Sales revenue
Debit Credit
Debit Credit](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F956b79d0-b8ff-4513-ab04-2143e5c531c4%2F66702e4b-acf0-48ac-867d-ba5a479efcd7%2Fa2chyq_processed.jpeg&w=3840&q=75)
Transcribed Image Text: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 10,200 points and sold additional product of $127,500, so it
recorded $137,700 of revenue. The aggregate stand-alone selling price of the purchased products is $137,700.
Seventy 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 $61,200 of merchandise. Sixty-five percent of those sales were for cash,
and the remainder were credit sales.
Journal entry worksheet
Note: Enter debits before credits.
Transaction
Journal entry worksheet
Record the August sales.
Note: Enter debits before credits.
2
Transaction
Cash
1
General Journal
General Journal
Cash
Accounts receivable
Sales revenue
Deferred revenue - loyalty points
Accounts receivable
Deferred revenue - loyalty points
Sales revenue
Debit Credit
Debit Credit
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
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 2 steps
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
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
![Intermediate Accounting: Reporting And Analysis](https://www.bartleby.com/isbn_cover_images/9781337788281/9781337788281_smallCoverImage.jpg)
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
![Individual Income Taxes](https://www.bartleby.com/isbn_cover_images/9780357109731/9780357109731_smallCoverImage.gif)
Individual Income Taxes
Accounting
ISBN:
9780357109731
Author:
Hoffman
Publisher:
CENGAGE LEARNING - CONSIGNMENT
![Intermediate Accounting: Reporting And Analysis](https://www.bartleby.com/isbn_cover_images/9781337788281/9781337788281_smallCoverImage.jpg)
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
![Individual Income Taxes](https://www.bartleby.com/isbn_cover_images/9780357109731/9780357109731_smallCoverImage.gif)
Individual Income Taxes
Accounting
ISBN:
9780357109731
Author:
Hoffman
Publisher:
CENGAGE LEARNING - CONSIGNMENT