The store sold 28 gift cards for $100 per card. at year-end, 23 of the gift cards are redeemed. Shamrock expects three of the cards to expire unused. Record the redemption and expected breakage revenue.
The store sold 28 gift cards for $100 per card. at year-end, 23 of the gift cards are redeemed. Shamrock expects three of the cards to expire unused. Record the redemption and expected breakage revenue.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
The store sold 28 gift cards for $100 per card. at year-end, 23 of the gift cards are redeemed. Shamrock expects three of the cards to expire unused. Record the redemption and expected breakage revenue.
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 2 steps
Follow-up Questions
Read through expert solutions to related follow-up questions below.
Follow-up Question
That was my answer and it was incorrect, as far as the Breakage revenue. See image.
Transcribed Image Text:The image displays a financial record entry for December 31, involving gift card revenue, sales revenue, and sales revenue from breakage. It uses a format typical of accounting entries:
1. **Unearned Gift Card Revenue**: Recorded with a value of 2600. This represents the total amount of gift card sales that have not yet been redeemed.
2. **Sales Revenue**: Listed with a value of 2300. This indicates the revenue earned from sales, presumably from redeemed gift cards.
3. **Sales Revenue (Breakage)**: Displayed with a value of 300. Breakage revenue refers to the estimated amount from gift cards that are sold but not expected to be redeemed.
The entry includes a note explaining its purpose: "(To record redemption and expected breakage revenue)." This indicates the entry is for tracking both the recognized revenue from redeemed gift cards and the expected revenue from those that are not redeemed.
Solution
by Bartleby ExpertKnowledge 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