Starlord's Music Shop's cash sales for Year 1 were $783,300, and $939,960 for Year 2. These figures included the 11.9% galatic sales tax. The store gives its customers coupons redeemable for a poster plus a Blue Swede CD. One coupon is issued for each dollar of sales. On the surrender of 100 coupons and $6.00 cash, the poster and CD are given to the customer. It is estimated that 80% of the coupons will be presented for redemption. Coupons redeemed in Year 1 totaled 420,000, and coupons redeemed in Year 2 totaled 750,000. Starlord's Music Shop bought 20,000 posters at $2.50/poster and 20,000 CDs at $7.50/CD. 1. Record the journal entry for sales and sales tax for Year 1 (assume all sales are in cash). Points Value: 10 Redemption Schedule Account Use this schedule to complete the journal entries below. Debit Credit Coupons Coupon Redeemed Redemptions Cash Received Inventory Costs Expense Total Y1 Potential Redemptions 560,000 5,600 33,600 56,000 22,400 Total Redeemed in Y1 420,000 4,200 25,200 42,000 16,800 Total Redeemed in Y2 140,000 1,400 8,400 14,000 5,600 2. Record the journal entry for coupon redemptions in Year 1. Points Value: 10 Account Debit Credit 3. Record the adjusting entry to accrue for the estimated liablity at the end of Year 1. Points Value: 10 Account Debit Credit
Starlord's Music Shop's cash sales for Year 1 were $783,300, and $939,960 for Year 2. These figures included the 11.9% galatic sales tax. The store gives its customers coupons redeemable for a poster plus a Blue Swede CD. One coupon is issued for each dollar of sales. On the surrender of 100 coupons and $6.00 cash, the poster and CD are given to the customer. It is estimated that 80% of the coupons will be presented for redemption. Coupons redeemed in Year 1 totaled 420,000, and coupons redeemed in Year 2 totaled 750,000. Starlord's Music Shop bought 20,000 posters at $2.50/poster and 20,000 CDs at $7.50/CD. 1. Record the journal entry for sales and sales tax for Year 1 (assume all sales are in cash). Points Value: 10 Redemption Schedule Account Use this schedule to complete the journal entries below. Debit Credit Coupons Coupon Redeemed Redemptions Cash Received Inventory Costs Expense Total Y1 Potential Redemptions 560,000 5,600 33,600 56,000 22,400 Total Redeemed in Y1 420,000 4,200 25,200 42,000 16,800 Total Redeemed in Y2 140,000 1,400 8,400 14,000 5,600 2. Record the journal entry for coupon redemptions in Year 1. Points Value: 10 Account Debit Credit 3. Record the adjusting entry to accrue for the estimated liablity at the end of Year 1. Points Value: 10 Account Debit Credit
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Starlord's Music Shop's cash sales for Year 1 were $783,300, and $939,960 for Year 2. These figures included the 11.9%
galatic sales tax.
The store gives its customers coupons redeemable for a poster plus a Blue Swede CD. One coupon is issued for each
dollar of sales. On the surrender of 100 coupons and $6.00 cash, the poster and CD are given to the customer. It is
estimated that 80% of the coupons will be presented for redemption. Coupons redeemed in Year 1 totaled 420,000,
and coupons redeemed in Year 2 totaled 750,000.
Starlord's Music Shop bought 20,000 posters at $2.50/poster and 20,000 CDs at $7.50/CD.
1. Record the journal entry for sales and sales tax for Year 1 (assume all sales are in cash).
Points Value: 10
Redemption Schedule
Account
Use this schedule to complete the journal entries below.
Debit
Credit
Coupons
Coupon
Redeemed
Redemptions
Cash Received Inventory Costs
Expense
Total Y1 Potential Redemptions
560,000
5,600
33,600
56,000
22,400
Total Redeemed in Y1
420,000
4,200
25,200
42,000
16,800
Total Redeemed in Y2
140,000
1,400
8,400
14,000
5,600
2. Record the journal entry for coupon redemptions in Year 1.
Points Value: 10
Account
Debit
Credit
Transcribed Image Text:3. Record the adjusting entry to accrue for the estimated liablity at the end of Year 1.
Points Value: 10
Account
Debit
Credit
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