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A local donut shop maintains a loyalty program for its customers who receive points for every coffee purchase. In fiscal 2020, the store made sales of $100,000 and awarded 5,000 points with a fair value of $5,000. The store estimates that approximately 90% of these points will eventually be redeemed by its members. The points expire in 5 years. Members did redeem 4,000 points during fiscal 2020.
Problem 1: What would the journal entries look like for 2020?
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Wendell’s Donut Shoppe is investigating the purchase of a new $34,500 donut-making machine. The new machine would permit the company to reduce the amount of part-time help needed, at a cost savings of $5,600 per year. What would be the total annual c..
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