Project #75455 - Accounting

Question 36

Irwin Music Shop gives its customers coupons redeemable for a poster plus a Bo Diddley 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 $749,000, and the coupons redeemed totaled 449,400. Sales for the second period were $903,000, and the coupons redeemed totaled 780,500. Irwin Music Shop bought 20,000 posters at $2/poster and 20,000 CDs at $6/CD.

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.
 
To record coupons redeemed. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.)

Period 1
Account Titles and Explanation
Debit
Credit

Period 2
Account Titles and Explanation
Debit
Credit
 

To record estimated liability. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.)

Period 1
Account Titles and Explanation
Debit
Credit


Period 2
Account Titles and Explanation
Debit
Credit

 

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Subject Mathematics
Due By (Pacific Time) 07/02/2015 06:46 pm
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