03-2 c Back to USSR - rev recog

03-2 c Back to USSR - rev recog - USSR has not offered...

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
Case 03-02 Back To The USSR Universal School Supply Retailer, Inc. (“USSR”), a public company, is a retailer specializing in clothing, equipment, supplies, and other products targeted at grade school, high school, and college students. USSR is offering a back-to-school promotion during the month of August in which customers who spend a minimum of $100 will receive a $20 gift card that can be applied to their next purchase at USSR. The gift cards expire on November 1 and cannot be redeemed for cash. Notwithstanding, management anticipates that between 50% and 85% of the gift cards will be redeemed.
Background image of page 1
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: USSR has not offered similar promotions in the past and does not have an established accounting policy for such promotions. USSRs merchandise margin is approximately 50%. Required: If a customer purchases $100 of merchandise during the promotion and as such receives a $20 gift card, how should USSR account for the transaction? If the gift card is subsequently redeemed or expires unused, how should USSR account for the redemption or expiration? Copyright 2001 Deloitte Development LLC All Rights Reserved....
View Full Document

This note was uploaded on 03/14/2010 for the course ACCOUNTING ACCT712 taught by Professor Barry during the Spring '10 term at American Academy of Art.

Ask a homework question - tutors are online