Question

CircuitTown commenced a gift card program in January 2021 and sold $11,700 of gift cards in January, $18,100 in February, and $21,650 E in March 2021 before discontinuing further gift card sales. During 2021, gift card redemptions were $7,500 for the January gift cards sold, $6,050 for the February cards, and $6,250 for the March cards. Circuit Town considers gift cards to be “broken” (not redeemable) E 10 months after sale. Required: 1. How much revenue will CircuitTown recognize with respect to January gift card sales during 2021? 2. Prepare journal entries to record the sale of January gift cards, redemption of gift cards (ignore sales tax), and breakage (expiration) E of gift cards. 3. How much revenue will Circuit Town recognize with respect to March gift card sales during 2021? 4. What liability for deferred revenue associated with gift card sales would CircuitTown show as of December 31, 2021? Complete this question by entering your answers in the tabs below. Req 2 Req 1 and 3 and 4 Prepare journal entries to record the sale of January gift cards, redemption of gift cards (ignore sales tax), and breakage (expiration of gift cards. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet 1 2 3 Record the January gift card sales. Note: Enter debits before credits.

Answer 1

E 11,700 / es 11,700 $11,700 Total revenue $11,700 will be recognised as the gevenue in 2021 because $7500 is the gift Comed redemption and $4,200 is the gift card breakage Journal Entries I Particulous Debit credit Cash Liability - Vreained gift card Revenue Cto record_gift card sales) Liability --Vinearmed giff Caud Reverne 7,50 0 Revenue- giff Cards 7,500 (to record january gift card redemption s Liability. Unewned gift card Revenced 4200 . Revenue - gif Cards 4200 [Formy record expiration of January grift Counds ] 3) $6,250 Here, in mauch $21,650 gift cards sold whereas in that only $6.250 is recognised as revenue as it is a value of gift card redemption. Remaining $.15,400 of sales que not recognised as

- Revenue in the year 2021 because the gift cards I sold in march 2016 will expire an January 2012 only. Co months after sale) in Led) $1S, doo It is the Year-end deferred revenue liability associated with gift Cond sales.