Question

In: Accounting

During February, the last month of the fiscal year, Be My Valentine Ltd. sells $20,400 of...

During February, the last month of the fiscal year, Be My Valentine Ltd. sells $20,400 of gift cards. From experience, management estimates that 8% of the gift cards sold will not be redeemed by customers. In March, $4,600 of these cards is redeemed for merchandise with a cost of $3,100. In April, further $11,500 of these cards is redeemed for merchandise with a cost of $3,800. The company uses a perpetual inventory system. Also in February, Be My Valentine had $1,000 of unused gift cards that were over one year old and were not expected to be used. The amount was in line with the company’s normal breakage and all other gift cards of the same age had been used. Prepare journal entries to record the transactions for February, March, and April. (Enter debit entries first followed by credit entries. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts. Round answers to 0 decimal places, e.g. 125.)

Solutions

Expert Solution

Date Accounting Descriptions Dr. Cr.
Feb Debtors A/c Dr. 20400
To Sale of Gift Cards A/c 20400
( Being Sale of Gift Cards Made)
March Redemption of Gift Cards Ex[penses A/c Dr. 3100
To Debtors A/c 3100
( Being Gift cards Redeemed)
March Redemption of Gift Cards Ex[penses A/c Dr. 3800
To Provision of Redemption of Gift Cards Expenses A/c 3800
( Being Provision mAde on year end)
March P and L A/c Dr. 1000
To Inventory A/c 1000
( Being Gift Cards aged more than One year written off)
March Redemption of Gift Cards Ex[penses A/c Dr. 2668
To Provision of Redemption of Gift Cards Expenses A/c 2668
( Being Provision mAde on year end)
April Provision of Redemption of Gift Cards Expenses A/c 3800
To Cash A/c 3800
( Being Provision expenses for Redemption cleared off)

ekkarill92 answered 1 year ago
Next > < Previous

Related Solutions

During February, the last month of the fiscal year, Be My Valentine Ltd. sells $20,000 of...
During February, the last month of the fiscal year, Be My Valentine Ltd. sells $20,000 of gift cards. From experience, management estimates that 8% of the gift cards sold will not be redeemed by customers. In March, $2,000 of these cards is redeemed for merchandise with a cost of $500. In April, further $15,000 of these cards is redeemed for merchandise with a cost of $5,000. The company uses a perpetual inventory system. Also in February, Be My Valentine had...
During February, the last month of the fiscal year, Be My Valentine Ltd. sells $20,000 of...
During February, the last month of the fiscal year, Be My Valentine Ltd. sells $20,000 of gift cards. From experience, management estimates that 8% of the gift cards sold will not be redeemed by customers. In March, $2,000 of these cards is redeemed for merchandise with a cost of $500. In April, further $15,000 of these cards is redeemed for merchandise with a cost of $5,000. The company uses a perpetual inventory system. Also in February, Be My Valentine had...
SALES PER MONTH DURING THE LAST YEAR 20X1 JANUARY $ 550,000 FEBRUARY $ 825,000 MARCH $...
SALES PER MONTH DURING THE LAST YEAR 20X1 JANUARY $ 550,000 FEBRUARY $ 825,000 MARCH $ 575,000 APRIL $ 870,000 MAY $ 1,080,000 JUNE $ 1,065,000 JULY $ 1,070,000 AUGUST $ 1,060,000 SEPTEMBER $ 1,180,000 OCTOBER $ 1,140,000 NOVEMBER $ 1,290,000 DECEMBER $ 1,460,000 I. Sales Projection: 20X2 After consulting the Company's Management Committee, it was agreed that business plans and strategies were deemed appropriate, a 35% increase in sales reported during the months of last year 20x1. All sales...
Widget Production Ltd. has a fiscal year end of June 30. In February​ 20X1, the Company...
Widget Production Ltd. has a fiscal year end of June 30. In February​ 20X1, the Company borrowed​ $750,000 to fund an expansion. The Company paid​ $21,000 to obtain this financing. In January​ 20X2, the Company repaid​ $250,000 of the principal and in June​ 20X3, it repaid the remaining​ $500,000. All repayments were made from cash flow from operations. For tax​ purposes, which one of the following schedule of claims represents the most rapid method of claiming the costs of obtaining...
Assume a dealer is offering a last-year passenger car model for $20,400 today or 4 year...
Assume a dealer is offering a last-year passenger car model for $20,400 today or 4 year financing terms for $109 weekly payment (a total of 209 payments with the first payment made now). For the dealer, it does not make an economic difference if the customer chooses any of these two options (options are equivalent). Page 2 of 2 [a] What is the effective annual interest rate (ieff = ?) implied in this offer assuming that compounding is weekly? [b]...
Performed counseling services for $29,200 cash. On February 1, Year 1, paid $20,400 cash to rent...
Performed counseling services for $29,200 cash. On February 1, Year 1, paid $20,400 cash to rent office space for the coming year. Adjusted the accounts to reflect the amount of rent used during the year.    Required Based on this information alone: a. Record the events in general ledger accounts under an accounting equation. b. Prepare an income statement, balance sheet, and statement of cash flows for the Year 1 accounting period. c. Ignoring all other future events, what is...
What might a manager do during the last quarter of a fiscal year if she wanted...
What might a manager do during the last quarter of a fiscal year if she wanted to decrease current annual net income? a.Delay shipments and sales to customers until after the end of the fiscal year. b. Relax credit policies for customers. c. Pay suppliers all amounts owed. d. Delay purchases from suppliers until after the end of the fiscal year.
The transactions completed by AM Express Company during March, the first month of the fiscal year,...
The transactions completed by AM Express Company during March, the first month of the fiscal year, were as follows: Mar 1. Issued Check No. 205 for March rent, $2,450. Mar 2. Purchased a vehicle on account from McIntyre Sales Co., $26,900. Mar 3. Purchased office equipment on account from Office Mate Inc., $1,570. Mar 5. Issued Invoice No. 91 to Ellis Co., $7,000. Mar 6. Received check for $7,950 from Chavez Co. in payment of invoice. Mar 7. Issued Invoice...
The transactions completed by Revere Courier during December, the first month of fiscal year, were as...
The transactions completed by Revere Courier during December, the first month of fiscal year, were as follows: Dec.1 Issued Check No.610 for December rent $4,200. Dec. 2 Issued Invoice No. 940 to Clifford Co., $1,740. Dec. 3 Received check for $4,800 from Ryan Co. in payment of account. Dec. 5 Purchased a vehicle on account from Platinum Motors, $37,300. Dec. 6 Purchased office equipment on account from Austin Computer Co., $4,500. Dec. 6 Issued Invoice No. 941 to Ernesto Co..,...
The transactions completed by AM Express Company during March, the first month of the fiscal year,...
The transactions completed by AM Express Company during March, the first month of the fiscal year, were as follows: Mar. 1. Issued Check No. 205 for March rent, $2,450. 2. Purchased a vehicle on account from McIntyre Sales Co., $26,900. 3. Purchased office equipment on account from Office Mate Inc., $1,570. 5. Issued Invoice No. 91 to Ellis Co., $7,000. 6. Received check for $7,950 from Chavez Co. in payment of invoice. 7. Issued Invoice No. 92 to Trent Co.,...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT