Question

Georgia's Salon - The salon sells $50,000 of gift cards in May 2019. These gift cards may be used anytime before their expo on May 31, 2020. 20. Refer to Georgia's Salon. Which of the following is the correct journal entry to record the sale of the g a. Cash ame 50,000 Accounts Payable 50,000 b. Cash 50,000 Unearned Sales Revenue 50,000 c. Cash 50,000 Sales Revenue 50,000 d. Cash 50,000 Prepaid Sales Revenue 50,000 21. Refer to Georgia's Salon. On May 31, 2020, all but $1.500 of the gift cards had been redeemed for salon services. Which of the following is the correct journal entry to record for the expired gift cards a. Unearned Sales Revenue 1,500 Accounts Payable 1,500 b. Unearned Sales Revenue Sales Revenue 1,500 c. Loss on Gift Cards 1,500 Sales Revenue 1,500 d. No entry is necessary 1,500 22. Current accounting standards indicate that the costs of intangible assets with an indefinite life, such as goodwill, should a. not be amortized, but should be reviewed annually for impairment. b. be reported on the statement of retained earnings in the year in which acquired. c. be amortized over a reasonable period of time not to exceed 40 years. d be debited to an expense account entirely in the year in which acquired 23. During the year. Going. Going, Gone sold 100 hot air balloons for $4,000 each. The balloons carry a 5-year warranty for defects. Estimates indicate that repair costs will average 4% of the total selling price. The estimated warranty liability at the beginning of the year was $42,000 $11,000 in claims was actually incurred during the year to honor their warranty. What was the balance in the estimated warranty liability at the end of the year? a547.000 b. $42,000 $37.000 d. 5 5.000 page Leaming Powered by Cogniero Page 5

Answer 1

Q 20. Ans b. Cash 50000 Unearned Sales revenue 50000 (because goods against the voucher is not yet provided) Q 21. Ans b. Unearned Sales revenue 1500 Sales revenue 1500 (because the gift voucher ghas expired so no need to provide goods or return money also thus recognise as revenue Q22. Ans a not be amortized, but to reviewed annually for impairment