Question

Check my work 10 points Supply Club, Inc., sells a variety of paper products, office supplies, and other products used by businesses and individual consumers. During July 2021 it started a loyalty program through which qualifying customers can accumulate points and redeem those points for discounts on future purchases. Redemption of a loyalty point reduces the price of one dollar of future purchases by 20% (equal to 20 cents). Customers do not earn additional loyalty points for purchases on which loyalty points are redeemed. Based on past experience, Supply Club estimates a 60% probability that any point issued will be redeemed for the discount. During July 2021, the company records $202,500 of revenue and awards 187,500 loyalty points. The aggregate stand-alone selling price of the purchased products is $202,500. Eighty percent of sales were cash sales, and the remainder were credit sales. Required: 1. & 2. Prepare Supply Club's journal entry to record July and August sales. During August, customers redeem loyalty points on $90,000 of merchandise. Seventy-five percent of those sales were for cash, and the remainder were credit sales. (Do not round intermediate calculations. If no entry is required for a transaction/event, select "No journal entry required in the first account field.) eBook Print References View transaction list Journal entry worksheet Record the July sales. Note: Enter debits before credits Transaction General Journal Debit Credit Record entry Clear entry View general journal < Prey 2 of 8 Next >

Answer 1

Date	Account Tiltles and Explanation	Debit	Credit
1	Cash (202500*80%)	$ 162,000
	Accounts Receivable (202500*20%)	$   40,500
	Sales Revenue - Purchased Product (202500*90%)		$ 182,250
	Deferred Revenue - Loyalty Point (202500*10%)		$   20,250
	To record Sales
	Selling Price of Loyalty Points	$   22,500
	187500*0.2*60%
	Total Selling Price (202500+22500)	$ 225,000
	% of Loyality Points (22500/225000)	10%
	% of Purchased Product (202500/225000)	90%
Date	Account Tiltles and Explanation	Debit	Credit
2	Cash (90000*80%*75%)	$   54,000
	Accounts Receivable (90000*80%*25%)	$   18,000
	Deferred Revenue - Loyalty Point (20250*80%)	$   16,200
	Sales Revenue - Purchased Product		$   88,200
	To record Sales