Irving music shop gives its customers coupons redeemable

Assignment Help Accounting Basics

Reference no: EM13601260

Irving Music Shop gives its customers coupons redeemable for a poster plus a Dixie Chicks CD. One coupon is issued for each dollar of sales. On the surrender of 100 coupons and $5.00 cash, the poster and CD are given to the customer. It is estimated that 80% of the coupons will be presented for redemption. Sales for the first period were $700,000, and the coupons redeemed totaled 340,000. Sales for the second period were $840,000, and the coupons redeemed totaled 850,000. Irving Music Shop bought 20,000 posters at $2.00/poster and 20,000 CDs at $6.00/CD.
Instructions:

Prepare the following entries for the two periods, assuming all the coupons expected to be redeemed from the first period were redeemed by the end of the second period.

Entry Period 1 Period 2
(a) To record coupons redeemed
(b) To record estimated liability

Reference no: EM13601260

Questions Cloud

When the amount we expect to be collect can be determined : when the amount we expect to be collect can be determined then the revenue is recognized to the extent that collections

The chairman of world food corporation announced that the : the chairman of world food corporation announced that the firms dividends will grow at a rate of 18 for the next three

The number of vacancies present in some metal at 788degc is : the number of vacancies present in some metal at 788degc is 1.8 x 1024 m-3. calculate the number of vacancies at

Need to prepare an income statement beginning with income : yr ending dec. 2012 abc corp. had income from operations before taxes of 1200000 before considering the following. see

Irving music shop gives its customers coupons redeemable : irving music shop gives its customers coupons redeemable for a poster plus a dixie chicks cd. one coupon is issued for

Under what circumstances is it appropriate to record : under what circumstances is it appropriate to record goodwill in the accounts? how should goodwill properly recorded on

Prepare the entry for the initial borrowing and the : on may 15 gruziks outback clothiers borrowed some money on a 4-month note to provide cash during the slow season of the

Intangible assets may be internally generated or purchased : intangible assets may be internally generated or purchased from another party. in either case the cost that should be

A full-time biochemist loves stock car racing to feed her : a full-time biochemist loves stock car racing. to feed her passion she bought a used dirt track car and has started

User Account

All Pages