A home gods retailer offers a sales incentive program where customers receive credit towards future purchases based on the dollar amount of their purchases today. For every $10 spent, a customer receives a $1 credit to use in the next 30 days. Based upon historical trends, the firm estimates that 35% of the credits will be redeemed.

Use the following facts for the next 2 questions.

Assume the credit associated with the sales incentive program is a separate performance obligation. If during the month the company sold $40,000 of product with a cost of $22,000, what is amount of a revenue allocated to product sales? Round to the nearest dollar. O $29,630 O $36,364 O $38,647 O $40,000 O None of the above In the next month, consistent with the firm's estimate, 35% of the credits were redeemed. The entry recorded to account for the redemption of these credits (excluding the effect of the costs of sales entry): O Increases Liabilities, Increases Stockholders' Equity O Increases Liabilities, Reduces Stockholders' Equity O Reduces Liabilities, Reduces Stockholders' Equity O Reduces Liabilities, Increases Stockholders' Equity O No entry needed