Question: Gift certificates 1. ABC Co. has just opened a novelty store. ABC decided to sell gift certificates as part of its sales promotion. Transactions relating

Gift certificates 1. ABC Co. has just opened a novelty store.

Gift certificates 1. ABC Co. has just opened a novelty store. ABC decided to sell gift certificates as part of its sales promotion. Transactions relating to the gift certificates during the year are shown below: a. Sold gift certificates worth P100,000. b. Gift certificates worth P80,000 were redeemed. c. P10,000 gift certificates expired. d. P2,000 gift certificates were estimated not to be redeemed. Requirement: Provide the pertinent entries. 2. ABC Co. sells gift certificates that expire one year after their issuance. Information on gift certificates is shown below: Unearned revenue - gift certificates, 1/1/2013 P600,000 Gift certificates sold during 2013 1,000,000 Prior year gift certificates redeemed in 2013 400,000 Gift certificates sold and redeemed in 2013 700,000 ABC's past experience indicates that 10% of gift certificates sold will not be redeemed. Requirement: How much is the unearned revenue on December 31, 2013

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