PIn the 1950's and 1960's supermarkets gave customers "green stamps" for every dollar of purchases at the grocery store. These stamps could then be redeemed by the customers for merchandise at an S&H warehouse.

Basically, the company (Sperry and Hutchinson) provided the stamps to the grocers who didn't have to pay for the stamps until the month after they were given out to customers. Unused stamps could be returned to the supplier. The customer would collect the stamps in a book until enough stamps had accumulated. The customer would then visit S&Hs warehouse and redeem merchandise (e.g., a TV, a basketball, a set of kitchen towels) for a specified number of filled stamp books.

Your analysis and response to the above questions should be a minimum 250 and a maximum of 500 words.

Questions:

1. When should S&H recognize the revenue and the expense?

2. How much expense should be recognized?