SM Department Store sells gift certificates, redeemable for store merchandise that expires one year after their issuance. SM has the following information pertaining to its gift certificate sales and redemptions: Unearned Gift Certificates, beginning - P600,000 Gift Certificates sold during the current year - P2,000,000 Prior year gift certificates redeemed in the current year - P200,000 Gift certificates sold and redeemed in the current year - P1,400,000 SM’s pattern indicates that 90% of gift checks sold will be redeemed. On December 31, 2022, how much should be reported by SM as Unearned Gift Certificates?
SM Department Store sells gift certificates, redeemable for store merchandise that expires one year after their issuance. SM has the following information pertaining to its gift certificate sales and redemptions: Unearned Gift Certificates, beginning - P600,000 Gift Certificates sold during the current year - P2,000,000 Prior year gift certificates redeemed in the current year - P200,000 Gift certificates sold and redeemed in the current year - P1,400,000 SM’s pattern indicates that 90% of gift checks sold will be redeemed. On December 31, 2022, how much should be reported by SM as Unearned Gift Certificates?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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SM Department Store sells gift certificates, redeemable for store merchandise that expires one year after their issuance. SM has the following information pertaining to its gift certificate sales and redemptions:
- Unearned Gift Certificates, beginning - P600,000
- Gift Certificates sold during the current year - P2,000,000
- Prior year gift certificates redeemed in the current year - P200,000
- Gift certificates sold and redeemed in the current year - P1,400,000
SM’s pattern indicates that 90% of gift checks sold will be redeemed.
On December 31, 2022, how much should be reported by SM as Unearned Gift Certificates?
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