Feathered Depot sold 5 7 , 7 5 0 of gift cards during the current year, and
Question:
Feathered Depot sold of gift cards during the current year, and recieved cash. Feathered uses the proportional method for accounting for gift card breakage. Based on historical experience, it estimates a breakage percentage of of its gift cards sales. During the year, customers redeemed of girft cards, purchasing inventory costing the company uses a perpetual inventory system.
A First, record the journal entry for gift card sales
B Now, prepare the journal entry when the gift cards are redeemed. Do not record the expense related to the sale. We will do that in the following step.
CNext record the journal entry for expense related to gift cards.
DNow prepare the journal entry to record the breakage revenue. It estimates a breakage percentage of Round percentage calculations to the nearest whole percent, X and round your final answer to the nearest whole dollar.
EWhat is the endofyear liability for gift cards if the liability for gift cards was $ at the beginning of the year?
Intermediate Accounting
ISBN: 978-0132162302
1st edition
Authors: Elizabeth A. Gordon, Jana S. Raedy, Alexander J. Sannella