Question 2. SM Department Store sells gift certificates redeemable only when merchandise is purchased. The gift certificates have an expiration date of two years after issuance date. The unearned revenue account relating to gift certificates has a beginning balance of P65,000 and the sale of gift certificates for P300,000 during the year 2018 was likewise credited to this account. You verified that during the year, total of gift certificates redeemed was P200,000 which the company charged to unearned revenue account. Required: 1. Compute the correct balance of unearned revenue account for gift certificates outstanding as at December 31,2018 2. Prepare any necessary adjusting entries
Question 2. SM Department Store sells gift certificates redeemable only when merchandise is purchased. The gift certificates have an expiration date of two years after issuance date. The unearned revenue account relating to gift certificates has a beginning balance of P65,000 and the sale of gift certificates for P300,000 during the year 2018 was likewise credited to this account. You verified that during the year, total of gift certificates redeemed was P200,000 which the company charged to unearned revenue account. Required: 1. Compute the correct balance of unearned revenue account for gift certificates outstanding as at December 31,2018 2. Prepare any necessary adjusting entries
Financial Accounting: The Impact on Decision Makers
10th Edition
ISBN:9781305654174
Author:Gary A. Porter, Curtis L. Norton
Publisher:Gary A. Porter, Curtis L. Norton
Chapter9: Current Liabilities, Contingencies, And The Time Value Of Money
Section: Chapter Questions
Problem 9.4E: Transaction Analysis Pollys Cards $ Gifts Shop had the following transactions during the year:...
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Transcribed Image Text:Question 2.
SM Department Store sells gift certificates redeemable only when merchandise is purchased. The gift
certificates have an expiration date of two years after issuance date. The unearned revenue account
relating to gift certificates has a beginning balance of P65,000 and the sale of gift certificates for P300,000
during the year 2018 was likewise credited to this account. You verified that during the year, total of gift
certificates redeemed was P200,000 which the company charged to unearned revenue account.
Required:
1. Compute the correct balance of unearned revenue account for gift certificates outstanding as at
December 31,2018
2. Prepare any necessary adjusting entries
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