Your answer is partially correct. Try again Pronghorn sells 20 nonrefundable $12

Question

Your answer is partially correct. Try again Pronghorn sells 20 nonrefundable $120 gift cards for 3D printer paper on March 1, 2017. The paper has a standalone selling price of $120 (cost $96). The gift cards expiration date is June 30, 2017, Pronghorn estimates that customers will not redeem 10% of these gift cards. The pattern of redemption is as follows Redemption Total March 31 April 30 June 30 50 % 80 85 Prepare the 2017 journal entries related to the gift cards at March 1, March 31, April 30, and 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 0 for the amounts. Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answer to 0 decimal places e.g. 58,971.) Date Account Titles and Explanation Debit Credit Mar. 1, 2017Cash Deferred Gross Profit Mar. 31, 2017 ; | Deferred Gross Profit Sales Revenue (To record sales) Cost of Goods Sold Cy All Rights Reserved. A Division of Version 4.24.3.3

Explanation / Answer

date Accounting Titles & Explanation Debit credit march1,2017 cash A/c ($120*20) $ 2,400.00        To gift card Liability A/c $ 2,400.00 (being Gift card Liability has been recorded) march 1,2017 Gift card liability A/c (20*$120*10%) $     240.00        To revenue A/c $     240.00 (being non redemption Estimation amount of gift coupons has been reocrded) march 31,2017 Gift card liability A/c $ 1,200.00           To Sales A/c ($2400*50%) $ 1,200.00 (being redemption of Gift cards By customers has been recorded) Cost of goods sold A/c (20*$96*50%) $     960.00           To Inventory A/c $     960.00 (being cost of goods sold has been recorded) April30,2017 Gift card liability A/c $     720.00           To Sales A/c ($2400*30%) $     720.00 (being redemption of Gift cards By customers has been recorded) Cost of goods sold A/c (20*$96*30%) $     576.00           To Inventory A/c $     576.00 (being cost of goods sold has been recorded) June 30,2017 Gift card liability A/c $     120.00           To Sales A/c ($2400*5%) $     120.00 (being redemption of Gift cards By customers has been recorded) Cost of goods sold A/c (20*$96*5%) $       96.00           To Inventory A/c $       96.00 (being cost of goods sold has been recorded) June 30,2017 Gift card liability A/c (20*$120*5%) $     120.00        To revenue A/c $     120.00 (being Breakage   amount of gift coupons has been reocrded)

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