Bull's Eye Department Stores, Inc. records $150,000 in gift card sales and receives cash in year 1. Customers redeemed 20% of the gift cards to purchase merchandise in year 1. The company estimatesbreakage as 15% and uses the proportional method. How much breakage revenue should be recorded at the end of year 1? (Round any intermediary percentages two decimal places, XXX%. Round your finalanswer to the nearest dollar.)A. $22,500B. $5,294C. $30,000D. $4,500

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Answered: Bull's Eye Department Stores, Inc.…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Rapoo Inc. sells gift certificates. One-half of the gift certificates outstanding on January 1 unredeemed as of yearend expired during the year. The Unearned Revenue from Gift Certificates account increased to P210,000 at yearend. The gross profit rate based on cost is 25%. Information on gift certificates is shown below: How much of the gift certificates sold during the year was redeemed? How much is the net income for the year arising from the gift certificates?
Chik’s Chickens has average accounts receivable of $5,533. Sales for the year were $9,000. What is its average collection period? (Use 365 days in a year. Do not round intermediate calculations. Round your answer to 2 decimal places.) Average collection period days
Blossom Technology's operating cycle is 71 days. Its inventory was $111,000 at the end of last year, and the company had cost of goods sold of $1.4 million. How long does it take Blossom to collect its receivables on average? (Use 365 days for calculation. Round intermediate calculations and final answer to 1 decimal place, e.g. 25.1.) It takes Blossom days to collect on its accounts receivable.
Chik’s Chickens has accounts receivable of $6,683. Sales for the year were $10,200. What is its average collection period? (Use 365 days in a year. Do not round intermediate calculations. Round your final answer to the nearest whole number.)
Krux sends its mobiles amounting P2,400 each to their customers on Sale on Return basis. These are treated like actual sales and recorded through the Sales Day Book. Two months before the end of financial year it sent 300 mobiles at an Invoice Price of P3,000 each, of which 40 mobiles are accepted by customers at P2,800 each. Rest of the goods sent no further report is available. Prepare necessary entries at the end of the accounting year for Krux mobiles.
a. Record Navis, Incorporated's sales for a month at $75,000. The items sold cost $62,500. Navis records sales at the total invoice amount. b. Record the return of $7,500 of the above sales within the 30-day return period. c. Record the receipt of payment on the remainder of the month's sales, assuming that customers purchasing $50,000 took advantage of a 2 percent cash discount for early payment. None of the customers taking advantage of the cash discount were among those that returned their purchases. Complete this question by entering your answers in the tabs below. Required A Required B Required C Record the receipt of payment on the remainder of the month's sales, assuming that customers purchasing $50,000 took advantage of a 2 percent cash discount for early payment. None of the customers taking advantage of the cash discount were among those that returned their purchases. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first…
Spencer Consulting, which invoices its clients on terms 2/10, n/30, had credit sales for May and June of $140,000 and $160,000, respectively. Analysis of Spencer's operations indicates that the pattern of customers' payments on account is as follows (percentages are of total monthly credit sales): Receiving Discount Beyond Discount Period Totals In month of sale 50% 20% 70% In month of following sale 15% 10% 25% Uncollectible accounts, returns, and allowances 5% 100% Determine the estimated cash collected on customers' accounts in June.
Sanders' Prime Time Lighting Co. has credit sales of $1,836,000 and accounts receivable of $224,400. Compute the value for the average collection period. (Use 365 days in a year. Do not round intermediate calculations. Round the final answer to the nearest whole number.) Average collection period days
Spencer Consulting, which invoices its clients on terms 2/10, n/30, had credit sales for May and June of $245,000 and $280,000, respectively. Analysis of Spencer's operations indicates that the pattern of customers' payments on account is as follows (percentages are of total monthly credit sales): Receiving Discount Beyond Discount Period Totals In month of sale 50% 20% 70% In month of following sale 15% 10% 25% Uncollectible accounts, returns, and allowances 5% 100% Determine the estimated cash collected on customers' accounts in June. $Answer
Myint's Merchandise Co., a retailer of everyday kitchen supplies, buys $4.5 million of goods from their primary supplier on terms of "1/10, net 50". What is the company's nominal cost of trade credit? Assume a 365-day year. Give your answer as a percentage to 2 decimal places. Do not include the "%" sign in your answer.
Marie's Clothing Store had an accounts receivable balance of $450,000 at the beginning of the year and a year-end balance of $610,000. Net credit sales for the year totaled $3,600,000. The average collection period of the receivables was: (Round any intermediary calculations to two decimal places and your final answer to the nearest day.) A. 54 days. B. 8 days. C. 46 days. D. 62 days.
A home gods retailer offers a sales incentive program where customers receive credit towards future purchases based on the dollar amount of their purchases today. For every $10 spent, a customer receives a $1 credit to use in the next 30 days. Based upon historical trends, the firm estimates that 35% of the credits will be redeemed. In the next month, consistent with the firm’s estimate, 35% of the credits were redeemed. The entry recorded to account for the redemption of these credits (excluding the effect of the costs of sales entry): A.) Increases Liabilities, Increases Stockholders’ Equity B.) Increases Liabilities, Reduces Stockholders’ Equity C.) Reduces Liabilities, Reduces Stockholders’ Equity D.) Reduces Liabilities, Increases Stockholders’ Equity C.) No entry needed

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