Chapter 13 Spiceland 6th edition

Chapter 13 Spiceland 6th edition - Exercise 13-4 Wages...

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Exercise 13-4 Wages expense (increases wages expense to $410,000). .......... 6,000 Liability – compensated future absences . ................... 6,000* * ($404,000 - 4,000] = $400,000 non-vacation wages x 1 / 40 = $10,000 vacation pay earned (4,000) vacation pay taken = $ 6,000 vacation pay carried over Exercise 13-9 Requirement 1 The entire $10,000 sold in January will be recognized as revenue during 2011. $6,000 because of gift card redemption; $4,000 because of gift card breakage. Requirement 2 January Gift Card Sales Cash. ................................................................. 10,000 Liability – unearned gift card revenue. ......... 10,000 Redemption of January Gift Cards Liability – unearned gift card revenue . ............ 6,000 Revenue – gift cards. .................................... 6,000 Expiration of January Gift Cards
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Liability – unearned gift card revenue . ............ 4,000 Revenue – gift cards. .................................... 4,000 Requirement 3 Of the $16,000 sold in March, $10,000 will be recognized as revenue: $4,000 because of gift card redemption; $6,000 of the remaining $12,000 because of gift card expiration. To calculate the amount of gift card breakage, consider that, if March sales all occurred on the first day of the month, all would have been outstanding for 10 months during 2011 and therefore all $12,000 of
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Chapter 13 Spiceland 6th edition - Exercise 13-4 Wages...

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