Cobb department store sells gift certificates redeemable only when merchandise is purchased. These gift certificates have an expiration date of two years after issuance date. Upon redemption or expiration, Cobb recognizes the unearned revenue as realized. Information for the current year is as follows: Unearned revenue,1/1 650,000 Gift certificates sold 2,250,000 Gift certificates redeemed 1,950,000 Expired gift certificates 100,000 Cost of goods sold 60%
Cobb department store sells gift certificates redeemable only when merchandise is purchased. These gift certificates have an expiration date of two years after issuance date. Upon redemption or expiration, Cobb recognizes the unearned revenue as realized. Information for the current year is as follows: Unearned revenue,1/1 650,000 Gift certificates sold 2,250,000 Gift certificates redeemed 1,950,000 Expired gift certificates 100,000 Cost of goods sold 60%
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter8: Current And Contingent Liabilities
Section: Chapter Questions
Problem 7MCQ
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- Cobb department store sells gift certificates redeemable only when merchandise is purchased. These gift certificates have an expiration date of two years after issuance date. Upon redemption or expiration, Cobb recognizes the unearned revenue as realized. Information for the current year is as follows:
Unearned revenue,1/1 650,000
Gift certificates sold 2,250,000
Gift certificates redeemed 1,950,000
Expired gift certificates 100,000
Cost of goods sold 60%
On Dec. 31, what amount should Cobb report as unearned revenue?
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