A Clothing Store Maintains a Loyalty Program for Its Customers

question 90

Essay

A clothing store maintains a loyalty program for its customers.For every purchase,members receive points that do not expire.In fiscal 2016,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 2017.
Provide the necessary journal entries for fiscal 2016 and 2017.

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Definitions:

PET Scans

A medical imaging technique that produces detailed, three-dimensional pictures of the inside of the body using a radioactive tracer to visualize metabolic or other biological processes.

CT Scans

Imaging procedures that use computer-processed combinations of many X-ray measurements taken from different angles to create cross-sectional images of the body.

MRIs

Magnetic Resonance Imaging, a medical imaging technique used to visualize internal structures of the body in detail.

Neuron

A specific type of cell that sends nerve signals; known as a neuron.