Using Excel to Account for Estimated Liabilities for a Rebate Program

Student Work Area

Required: Provide input into cells shaded in yellow in this template. Use mathematical formulas with cell references to the Problem and work areas as indicated.

PROBLEM

Seasons Books sold a best-selling novel in July. Included in each book was a mail-in rebate for a future book purchase if the customer sends in proof of purchase with a completed rebate form. Seasons has provided the following sales and rebate information and its estimate of the purchasers will claim the rebate.

a.

Calculate the sales revenue and the unearned revenue related to the loyalty program that Seasons earned in July on this book.

Stand-alone book sales

Stand-alone value of rebates

Number of copies sold

50,000

Total value

Selling price per novel

$ 8.00

Value of mail-in rebate

$ 2.00

Allocation:

Estimate of rebate claims

10%

Earned revenue

Unearned revenue

b.

Prepare the journal entry to record the sale and the unearned revenue Seasons Books should record.

Date

Debit

Credit

July