Steig’s Sports Store has a customer loyalty program in which it issues points to customers for...
Steig’s Sports Store has a customer loyalty program in which it
issues points to customers for every
cash purchase that can be applied to future purchases. For every
dollar spent, a customer receives
three points. Each point is worth one cent. There is no expiry date
on the points. On December 31st,
2017, the store’s year end, Steig estimates 35% of the points
issued will eventually be redeemed.
What is the journal entry to record the end of year estimate given
there were 900,000 points
outstanding. Record the necessary journal entry or entries. Note,
ignore taxes.
GENERAL JOURNAL
Date Account Titles and Explanation PR Debit Credit
On January 11, 2018 Steig’s Sports Store customers redeem a total
of 102,000 points on cash sales
of $7,350 (cost of merchandise was $3,308). What is the journal
entry to record the sales. .Please
note, new points from sales are not recorded until year end.
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