CircuitTown commenced a gift card program in January 2018 and sold $13,150 of gift cards in January, $16,000 in February, and $17,400 in March of 2018 before discontinuing further gift card sales. During 2018, gift card redemptions were $7,800 for the January gift cards sold, $6,300 for the February cards, and $4,800 for the March cards. CircuitTown considers gift cards to be "broken" (not redeemable) 10 months after sale. Required: 1. How much revenue will CircuitTown recognize with respect to January gift card sales during 2018? 2. Prepare journal entries to record the sale of January gift cards, redemption of gift cards (ignore sales tax), and breakage (expiration) of gift cards. 3. How much revenue will CircuitTown recognize with respect to March gift card sales during 2018? 4. What liability for deferred revenue associated with gift card sales would CircuitTown show as of December 31, 2018? Complete this question by entering your answers in the tabs below. Req 2 Req 1 3 and 4 Prepare journal entries to record the sale of January gift cards, redemption of gift cards (ignore sales tax), and breakage (expiration) of gift cards. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet 1 2 3 Record the January gift card sales. Note: Enter debits before credits. Event General Journal Debit Credit 1 View general journal Record entry Clear entry Journal entry worksheet 2 3 1 Record the redemption of January gift cards. Note: Enter debits before credits. Event General Journal Debit Credit 2 Record entry Clear entry View general journal Journal entry worksheet 3 2 1 Record the expiration of January gift cards. Note: Enter debits before credits. Event General Journal Debit Credit 3 Record entry View general journal Clear entry CircuitTown commenced a gift card program in January 2018 and sold $13,150 of gift cards in January, $16,000 in February, and $17,400 in March of 2018 before discontinuing further gift card sales. During 2018, gift card redemptions were $7,800 for the January gift cards sold, $6,300 for the February cards, and $4,800 for the March cards. CircuitTown considers gift cards to be "broken" (not redeemable) 10 months after sale. Required: 1. How much revenue will CircuitTown recognize with respect to January gift card sales during 2018? 2. Prepare journal entries to record the sale of January gift cards, redemption of gift cards (ignore sales tax), and breakage (expiration) of gift cards. 3. How much revenue will CircuitTown recognize with respect to March gift card sales during 2018? 4. What liability for deferred revenue associated with gift card sales would CircuitTown show as of December 31, 2018? Complete this question by entering your answers in the tabs below. Req 1 3 and 4 Req 2 How much revenue will CircuitTown recognize with respect to January gift card and March gift card sales during 2018. What liability for deferred revenue associated with gift card sales would CircuitTown show as of December 31, 2018? Revenue recognized from January gift card sales Revenue recognized from March gift card sales 4 Year-end deferred revenue liability Req 2 Req 1 3 and 4
