- This topic has 3 replies, 3 voices, and was last updated 7 years, 7 months ago by .
-
Topic
-
Regal Department store sells gift certificates, redeemable for store merchandise, that expire one year after their issuance. Regal has the following information pertaining to its gift certificates sales and redemptions:
Unredeemed at 12/31/09 ā $75,000
2010 Sales ā $250,000
2010 Redemptions for Prior Year Sales ā $25,000
2010 Redemptions of Current Year Sales ā $175,000Regalās experience indicates that 10% of gift certificates sold will not be redeemed. In its December 31, 2010 Balance sheet, what amount should Regal report as unearned revenue?
The solution says the answer is $50,000. The explanation is that all of the 2009 unearned revenue is redeemed or expired. Then you have the ($250,000 2010 sales) minus ($175,000 2010 redemptions) minus (10% * $250,000) = $50,000
my question is ..
how the 10% of unredeemed gift certification will be recorded …???It ain't About How Hard You Hit
- You must be logged in to reply to this topic.