A Clothing Store Maintains a Loyalty Program for Its Customers

question 70

Essay

A clothing store maintains a loyalty program for its customers.Members receive points for every purchase which do not expire.In fiscal 2012,the store made sales of $1 million and awarded 50,000 points that have a fair value of $50,000.The company estimates that approximately 75% of these points will be redeemed by members.Members redeemed 10,000 points in fiscal 2013.
Provide the necessary journal entries for fiscal 2012 and 2013.

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Definitions:

Employee Attitudes

The feelings and beliefs that employees have about their work, workplace, and employers, influencing their behavior and job performance.

Flexibility

The ability of an organization or employee to adapt to changes or accommodate various demands, often in scheduling, working hours, or job duties.

Citizenship

A status conferred by a government to its nationals that includes certain rights, responsibilities, and privileges.

Psychological Contract

An unwritten agreement between an employer and an employee that outlines mutual expectations, including job security, salary, and work conditions.