Question

Supply Club Inc.

Supply Club, Inc, ses avanety of paper products, office supplies, and other products used by businesses and individual consumers During July 2021 staned 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 80% probability that any point issued will be redeemed for the discount. During July 2021, the company records $193,500 of revenue and awards 134.375 loyalty points. The aggregate stand-alone selling price of the purchased products is $199,500. Seventy percent of sales were cash sales and the remainder were credt sales Required: 1. & 2. Prepare Supply Club's journal entry to record July and August sales. During August, customers redeem loyalty points on 586.000 of merchandise Seventy-five percent of those sales were for cash, and the remander 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 feld. Answer is not complete General Journal Dahil Credit Cash Accounts relatie Deres y point OOOOOO Drevos Next > here to search o 1

Answer 1

Updated Answer

Date July Debit Credit Calculation 135450 (193500*70%) 58050 (193500*30%) 172000 21500 (134375*20%*80%) Particulatr Cash Account Receivable To Sales Revenue To Deferred revenue Loyalty Points (being Sales Revenue for july month booked and royalty points benefits are recored) Cash Account Receivable Deferred revenue Loyalty Points To Sales Revenue (being Sales Revenue for Aug month booked and royalty points benefits recored earlier are used by Cutomer) Aug 45150 19350 21500 (86000-21500) *70% (86000-21500)*30% (134375*20%*80%) 860

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