Prepare the 2025 journal entries related to the gift cards at March 1, March 31, April 30, and June 30. Crane recognizes breakage when cards expire (June 30). (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter O for the amounts. Round present value factor calculations to 5 decimal places, eg. 1.25124 and final answers to O decimal places eg. 58,971. List all debit entries before credit entries. Record journal entries in the order presented in the problem.)
Prepare the 2025 journal entries related to the gift cards at March 1, March 31, April 30, and June 30. Crane recognizes breakage when cards expire (June 30). (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter O for the amounts. Round present value factor calculations to 5 decimal places, eg. 1.25124 and final answers to O decimal places eg. 58,971. List all debit entries before credit entries. Record journal entries in the order presented in the problem.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Concept explainers
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At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
Question
Please do not give image format
Transcribed Image Text:ar. 31, 2025
r. 30, 2025
Mr.30.2025
n. 30, 2025
r.30,2025
n. 30, 2025
n. 30,2025
Cost of Goods Sold
V
Inventory
(To record sales of cards redeemed)
Contract Asset
Sales Revenue
(To record cost of goods sold)
Cost of Goods Sold
Show Transcribed Text
Inventory
(To record sales of cards redeemed)
Cost of Goods Sold
Cost of Goods Sold
Inventory
(To record sales of cards redeemed).
Cost of Goods Sold
Inventory
(To record cost of goods sold)
Contract Asset
Sales Revenue
J
(To record sales of cards not redeemed)
Ĉ
880
660
528
110
528
0000
110
88
8
6
Transcribed Image Text:Crane sells 20 nonrefundable $110 gift cards for 3D printer paper on March 1, 2025. The paper has a standalone selling price of
$110 (cost $88). The gift cards expiration date is June 30, 2025. Crane estimates that customers will not redeem 15% of these gift
cards (breakage). The pattern of redemption is as follows.
March 31
April 30
June 30
Date
Prepare the 2025 journal entries related to the gift cards at March 1, March 31, April 30, and June 30, Crane recognizes breakage
when cards expire (June 30). (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no
entry is required, select "No entry" for the account titles and enter O for the amounts. Round present value factor calculations to 5 decimal
places, eg. 1.25124 and final answers to O decimal places eg. 58,971. List all debit entries before credit entries. Record journal entries in
the order presented in the problem.)
ar. 1, 2025
Show Transcribed Text
ar. 1.2025
Redemption Total
50 %
ar. 31,2025
ar: 31,2025
80
85
Cash
Account Titles and Explanation
Liability to Bonus Point Customers
Contract Asset
Sales Revenue
(To record sales of cards redeemed)
Contract Asset
Sales Revenue
(To record cost of goods sold)
Cost of Goods Sold
3
Ć
Debit
2200
330
1100
880
Credit
22
11
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