Moon Company sold $2,000 in gift cards on a special promotion on October 15, 2024, and sold $3.0 November 15, 2024. Of the cards sold in October, $200 were redeemed in October, $500 in November, and $600 in December. Of the gift cards sold in November, $300 were redeemed in November and $700 were redeemed in December Moon Company views the probability of redemption of a gift card as remote if the card has not been redeemed within two months. At 12/31/2024, Moon Company would show a deferred revenue account for the gift cards with a balance of Multiple Choice

Moon Company sold $2,000 in gift cards on a special promotion on October 15, 2024, and sold $3.0 November 15, 2024. Of the cards sold in October, $200 were redeemed in October, $500 in November, and $600 in December. Of the gift cards sold in November, $300 were redeemed in November and $700 were redeemed in December Moon Company views the probability of redemption of a gift card as remote if the card has not been redeemed within two months. At 12/31/2024, Moon Company would show a deferred revenue account for the gift cards with a balance of Multiple Choice

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter8: Current And Contingent Liabilities

Section: Chapter Questions

Problem 7MCQ

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The following facts relate to gift cards sold by Sunbru Coffee Company during 2018. Sunbru’s fiscal year ends on December 31. (a.) In October 2018, sold $3,100 of gift cards, and redeemed $510 of those gift cards. (b.) In November 2018, sold $4,100 of gift cards, and redeemed $1,410 of October gift cards and $710 of November gift cards. (c.) In December 2018, sold $3,100 of gift cards, and redeemed $210 of October gift cards, $2,100 of November gift cards, and $410 of December gift cards. (d.) Sunbru views a gift card to be “broken” (with a remote probability of redemption) two months after the end of the month in which it is sold. Thus, an unredeemed gift card sold at any time during July would be viewed as broken as of September 30. Required:1. Prepare all journal entries appropriate to be recorded only during the month of December 2018 relevant to gift card sales, gift card redemptions, and gift card breakage.2. Determine the balance of the deferred revenue liability to be…
CircuitTown commenced a gift card program in January 2024 and sold $10,000 of gift cards in January, $15,000 in February, and $16,000 in March 2024 before discontinuing further gift card sales. During 2024, gift card redemptions were $6,000 for the January gift cards sold, $4,500 for the February cards, and $4,000 for the March cards. CircuitTown considers gift cards to be “broken” (not redeemable) 10 months after sale. Required: How much revenue will CircuitTown recognize with respect to January gift card sales during 2024? Prepare journal entries to record the sale of January gift cards, redemption of gift cards (ignore sales tax), and breakage (expiration) of gift cards. How much revenue will CircuitTown recognize with respect to March gift card sales during 2024? What liability for deferred revenue associated with gift card sales would CircuitTown show as of December 31, 2024?
MOA sells gift cards that are redeemable only at its stores. The company's policy is to record the redemption amount as realized. MOA sold P1,800,000 worth of gift certificates in 2019 and redeemed P1,560,000 worth of gift certificates. The value of outstanding gift certificates as of January 1, 2019 is P520,000. The company's gross profit margin is 40%. What is the obligation for outstanding gift cards at the end of the fiscal year on December 31, 2019?
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 P
In an attempt to increase sales, Kingbird, Inc. began a special promotion on September 1,2021. A $0.75 coupon was printed on the label of 600,000 cans of soup. All of these cans were sold that day for $2.25 each to a large chain of grocery stores on account. Kingbird expected that 20% of the coupons would be redeemed. By the end of December 2021, Kingbird had redeemed 48,000 coupons. Kingbird has a December 31 year-end and a periodic inventory system. Prepare the journal entry to record the sales and transactions related to the coupon promotion. Ignore sales taxes. (Credit occount titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry“ for the account titles and enter O for the amounts.) Date Account Titles and Explanation Debit Credit Sept. 1 eTextbook and Media List of Accounts Prepare a summary transaction dated December 31, 2021, for the coupons redeemed. (Credit account titles are automatically indented when…
ABC began a gift card program in January 2023 and sold $15,350 of gift cards in January, $17,950 in February, and $20,950 in March 2023 before discontinuing further gift card sales. During 2023, gift card redemptions were $8,700 for the January gift cards sold, $4,650 for the February cards, and $6,300 for the March cards. ABC considers gift cards to be “broken” (a remote probability of redemption) 10 months after sale. What liability for deferred revenue associated with gift card sales would ABC show as of December 31, 2023? a) 6,300 b) 20,950 c) 54,250 d) 14,650
CircuitTown commenced a gift card program in January 2024 and sold $12,900 of gift cards in January, $19,950 in February, and $19,800 in March 2024 before discontinuing further gift card sales. During 2024, gift card redemptions were $8,400 for the January gift cards sold, $5,700 for the February cards, and $5,550 for the March cards. CircuitTown considers gift cards to be “broken” (not redeemable) 10 months after sale. Required: 1. How much revenue will CircuitTown recognize with respect to March gift card sales during 2024?2. What liability for deferred revenue associated with gift card sales would CircuitTown show as of December 31, 2024?
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.
CircuitTown commenced a gift card program in January 2018 and sold $10,000 of gift cards in January, $15,000in February, and $16,000 in March 2018 before discontinuing further gift card sales. During 2018, gift cardredemptions were $6,000 for the January gift cards sold, $4,500 for the February cards, and $4,000 for the Marchcards. CircuitTown considers gift cards to be “broken” (not redeemable) 10 months after sale.Required:1. How much revenue will CircuitTown recognize with respect to January gift card sales during 2018?2. Prepare journal entries to record the sale of January gift cards, redemption of gift cards (ignore sales tax), andbreakage (expiration) of gift cards.3. How much revenue will CircuitTown recognize with respect to March gift card sales during 2018?4. What liability for deferred revenue associated with gift card sales would CircuitTown show as of December31, 2018?
Cobb 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?
Shoemart Company issues gift certificates in denominations of P50, P100, P500 and P1,000. These certificates are redeemable in merchandise having an average gross profit of 30% of selling price. During the current year, the entity sold P500,000 worth of gift certificates and redeemed certificates having a sales value of P400,000. It is estimated that 8% of the certificates issued will not be redeemed by reason of expiration. 1. The balance of the gift certificates payable account as of year-end is:
CircuitTown commenced a gift card program in January 2021 and sold $10,000 of gift cards in January, $15,000 in February, and $16,000 in March 2021 before discontinuing further gift card sales. During 2021, gift card redemptions were $6,000 for the January gift cards sold, $4,500 for the February cards, and $4,000 for the March cards. CircuitTown considers gift cards to be “broken” (not redeemable) 10 months after sale. Required:1. How much revenue will CircuitTown recognize with respect to January gift card sales during 2021?2. Prepare journal entries to record the sale of January gift cards, redemption of gift cards (ignore sales tax), and breakage (expiration) of gift cards.3. How much revenue will CircuitTown recognize with respect to March gift card sales during 2021?4. What liability for deferred revenue associated with gift card sales would CircuitTown show as of December 31, 2021?