Colombo Coffee sells gift cards that can be used at its 55 branches. During 2015, customers purchased $25,000 of gift cards, of which $3,000 were redeemed during 2016.

It is estimated that a balance of $1,500 of cards sold in 2015 remains unused as of the end of 2016, and Colombo determines that this amount will never be redeemed, based on historical

experience. During 2016, Colombo further sold $32,000 of gift cards, of which $26,000 were redeemed and $6,000 remain unused but may be used by customer in 2017.

Required:

How much gift card revenue should Colombo recognize in 2016?

The answer is $30500

Colombo Coffee sells gift cards that can be used at its 55 branches. During 2015, customers purchased $25,000 of gift cards, of which $3,000 were redeemed during 2016. It is estimated that a balance of $1,500 of cards sold in 2015 remains unused as of the end of 2016, and Colombo determines that this amount will never be redeemed, based on historical experience. During 2016, Colombo further sold $32,000 of gift cards, of which $26,000 were redeemed and $6,000 remain unused but may be used by customer in 2017. Required: How much gift card revenue should Colombo recognize in 2016? $30,500