Canadian Tire Corporation Limited is composed of two main business
Canadian Tire Corporation, Limited is composed of two main business operations that offer a range of retail goods and services, including general merchandise, apparel, sporting goods, petroleum, and financial services. Exhibit 9-4 contains Note 3 setting out the accounting policies applied for sales and warranty returns and customer loyalty programs and Note 21 detailing Canadian Tire’s provisions from the company’s 2013 financial statements.
Required:
a. Using the information from Notes 3 and 21 in Exhibit 9-4, explain how Canadian Tire accounts for its sales and warranty returns provision, including the financial impacts on the company’s 2013 financial statements.
b. The Canadian Tire “money” program is the company’s most significant loyalty program. Using the information from Notes 3 and 21 in Exhibit 9-4, explain how the company accounts for its loyalty programs, including the financial impacts on the company’s 2013 financial statements.
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