Question

Problem 1 A clothing store maintains a loyalty program for its customers. For every purchase, members receive points that do not expire. In fiscal 2019, the store made cash sales of $1 million and awarded 50,000 points that have a fair value of $50,000. The company estimates that approximately 75% of these points will be redeemed by members. Members redeemed 10,000 points in fiscal 2020. Members redeemed 20,000 points in fiscal 2021 Provide the necessary journal entries for the cash sale and point recording for fiscal 2019 point redemption in the subsequent years.

Answer 1

2019. 1) on salls Cash DR. CR. $ 1,000,000 $ 950,000 $ 50,000 Salls Revenue Deferred Revenue (customed bery stonen Loyalty 2020 27 Redemption. Deferred Revenue Sales Revenue DR. CR. $10,000 $ 10,000 r $50,000 (x) 10 points L 30,000 ints 2001 3.) DR $20,000 Redemption. Desereed Revenue salls Revenue ( $so,000 & 20,000 Points (R. $20,000. L 50,000 Points