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.
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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.
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That was my answer and it was incorrect, as far as the Breakage revenue. See image.
- A home gods retailer offers a sales incentive program where customers receive credit towards future purchases based on the dollar amount of their purchases today. For every $10 spent, a customer receives a $1 credit to use in the next 30 days. Based upon historical trends, the firm estimates that 35% of the credits will be redeemed. In the next month, consistent with the firm’s estimate, 35% of the credits were redeemed. The entry recorded to account for the redemption of these credits (excluding the effect of the costs of sales entry): A.) Increases Liabilities, Increases Stockholders’ Equity B.) Increases Liabilities, Reduces Stockholders’ Equity C.) Reduces Liabilities, Reduces Stockholders’ Equity D.) Reduces Liabilities, Increases Stockholders’ Equity C.) No entry neededQuick Tire and Lube received a 120-day, 9% note for $60,000, dated June 12, from a customer on account. Assume 360 days in a year. Question Content Area a. Determine the due date of the note. b. Determine the maturity value of the note. Question Content Area c. Journalize the entry to record the receipt of the payment of the note at maturity. If an amount box does not require an entry, leave it blank.GoodBuy sells gift cards redeemable for GoodBuy products either in store or online. During 2018, GoodBuysold $1,000,000 of gift cards, and $840,000 of the gift cards were redeemed for products. As of December 31,2018, $30,000 of the remaining gift cards had passed the date at which GoodBuy concludes that the cards willnever be redeemed. How much gift card revenue should GoodBuy recognize in 2018?
- Rapoo Inc. sells gift certificates. One-half of the gift certificates outstanding on January 1 unredeemed as of yearend expired during the year. The Unearned Revenue from Gift Certificates account increased to P210,000 at yearend. The gross profit rate based on cost is 25%. Information on gift certificates is shown below: How much of the gift certificates sold during the year was redeemed? How much is the net income for the year arising from the gift certificates?G V Required information [The following information applies to the questions displayed below.] On January 1, 2021, the general ledger of ACME Fireworks includes the following account balances: Accounts Cash Accounts Receivable Allowance for Uncollectible Accounts Inventory Land Equipment Accumulated Depreciation Accounts Payable Notes Payable (6%, due April 1, 2022) Common Stock Retained Earnings Totals # 3 54,645 E D During January 2021, the following transactions occur: January purchase date. 2 Sold gift cards totaling $10,000. The cards are redeemable for merchandise within one year of the January 6 Purchase additional inventory on account, $157,000. The cost of the units sold is $78,800. January 15 Firework sales for the first half of the month total $145,000. All of these sales are on account. C $ 4 R LL JUL 10 www. 8 I ( 9 ( J K A O 0 |6 L PWilson Cafeteria issues gift cards, which are very popular in the small town where the restaurant is located. In a recent month, Wilson issued $4,000 in gift cards. Experience indicates that 80 percent of the cards will be redeemed before they expire. Required: What is the entry to record the estimated gift card expense? If an amount box does not require an entry, leave it blank.
- On May 31, Marty’s Ice Cream Shop sells gift cards for $5,000. Customers redeem $1,200 in June, $2,100 in July, and $1,400 in August. Marty’s experience is that any unredeemed gift cards as of August 31 are not likely to be redeemed. Calculate the amount of gift card revenue each month.On July 10, 2020, Pharoah Music sold CDs to retailers on account and recorded sales revenue of $665,000 (cost $478,800). Pharoah grants the right to return CDs that do not sell in 3 months following delivery. Past experience indicates that the normal return rate is 15%. By October 11, 2020, retailers returned CDs to Pharoah and were granted credit of $79,300.Prepare Pharoah’s journal entries to record (a) the sale on July 10, 2020, and (b) $79,300 of returns on October 11, 2020, and on October 31, 2020. Assume that Pharoah prepares financial statement on October 31, 2020. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts.)On July 10, 2020, Amodt Music sold CDs to retailers on account and recorded sales revenue of $700,000 (cost $560,000). Amodt grants the right to return CDs that do not sell in 3 months following delivery. Past experience indicates that the normal return rate is 15%. By October 11, 2020, retailers returned CDs to Amodt and were granted credit of $78,000. Prepare Amodt's journal entries to record (a) the sale on July 10, 2020, and (b) $78,000 of returns on October 11, 2020, and on October 31, 2020. Assume that Amodt prepares financial statement on October 31, 2020.
- Mimay Store sells gift certificates redeemable for store merchandise. The certificates expire one year after their issuance. Mimay has the following information pertaining to its gift certificates sales and redemptions: Unearned on December 31, 2005 600,000 2006 sales 2,000,000 2006 redemptions of prior-year sales 200,000 2006 redemptions of current-year sales 1,400,000 Mimay's experience indicates that 10% of gift certificates sold will not be redeemed. Mimay uses PFRS 15. In its December 31, 2006 statement of profit or loss, what amount should Mimay report as total revenue relating to gift certificates?Bull's Eye Department Stores, Inc. records $150,000 in gift card sales and receives cash in year 1. Customers redeemed 20% of the gift cards to purchase merchandise in year 1. The company estimates breakage as 15% and uses the proportional method. How much breakage revenue should be recorded at the end of year 1? (Round any intermediary percentages two decimal places, XXX%. Round your final answer to the nearest dollar.) A. $22,500 B. $5,294 C. $30,000 D. $4,500Cobb department store sells gift certificates redeemable only when merchandise is purchased. These gift certificates have an expiration date of two years after issuance date. Upon redemption or expiration, Cobb recognizes the unearned revenue as realized. Information for the current year is as follows: Unearned revenue,1/1 650,000 Gift certificates sold 2,250,000 Gift certificates redeemed 1,950,000 Expired gift certificates 100,000 Cost of goods sold 60% On Dec. 31, what amount should Cobb report as unearned revenue?