During February, the last month of the fiscal year, Be My Valentine Ltd. sells $20,300 of...
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During February, the last month of the fiscal year, Be My Valentine Ltd. sells $20,300 of gift cards. From experience, management estimates that 8% of the gift cards sold will not be redeemed by customers. In March, $4,600 of these cards is redeemed for merchandise with a cost of $2,600. In April, further $11,500 of these cards is redeemed for merchandise with a cost of $3,800. The company uses a perpetual inventory system. Also in February, Be My Valentine had $1,000 of unused gift cards that were over one year old and were not expected to be used. The amount was in line with the company's normal breakage and all other gift cards of the same age had been used. Prepare journal entries to record the transactions for February, March, and April. (Enter debit entries first followed by credit entries. Credit account 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. Round answers to O decimal places, e.g. 125.) Date Account Titles and Explanation Debit Credit (Cash received for gift cards) (To record breakage) Prepare journal entries to record the transactions for February, March, and April. (Enter debit entries first followed by credit entries. Credit account 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. Round answers to O decimal places, eg. 125.) Date Account Titles and Explanation Debit Credit (Cash received for gift cards) (To record breakage) I (Gift cards redeemed for merchandise) (To record cost of merchandise) Torecord baakaan) (To record cost of merchandise) (To record breakage) (Gift cards redeemed for merchandise) (To record cost of merchandise) (To record breakage) During February, the last month of the fiscal year, Be My Valentine Ltd. sells $20,300 of gift cards. From experience, management estimates that 8% of the gift cards sold will not be redeemed by customers. In March, $4,600 of these cards is redeemed for merchandise with a cost of $2,600. In April, further $11,500 of these cards is redeemed for merchandise with a cost of $3,800. The company uses a perpetual inventory system. Also in February, Be My Valentine had $1,000 of unused gift cards that were over one year old and were not expected to be used. The amount was in line with the company's normal breakage and all other gift cards of the same age had been used. Prepare journal entries to record the transactions for February, March, and April. (Enter debit entries first followed by credit entries. Credit account 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. Round answers to O decimal places, e.g. 125.) Date Account Titles and Explanation Debit Credit (Cash received for gift cards) (To record breakage) Prepare journal entries to record the transactions for February, March, and April. (Enter debit entries first followed by credit entries. Credit account 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. Round answers to O decimal places, eg. 125.) Date Account Titles and Explanation Debit Credit (Cash received for gift cards) (To record breakage) I (Gift cards redeemed for merchandise) (To record cost of merchandise) Torecord baakaan) (To record cost of merchandise) (To record breakage) (Gift cards redeemed for merchandise) (To record cost of merchandise) (To record breakage)
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Date Account Title Debit Credit Feb Cash 20300 Gift card liability 20300 Cash received for gift card... View the full answer
Related Book For
Government and Not for Profit Accounting Concepts and Practices
ISBN: 978-1118983270
7th edition
Authors: Michael Granof, Saleha Khumawala, Thad Calabrese, Daniel Smith
Posted Date:
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