During the month of July, Happy Go Lucky Toy Company started a new promotion. The company offered to reward their customers for all sales made on Barbie dolls or Toy Trucks during the month of July. For each sale made, the customer will receive a 2% reward of the sales price, which can be redeemed on future purchases until December of the current year. Happy Go Lucky Toy Company estimates that 50% of the rewards will be redeemed. The stand-alone value of the rewards is $ 3,000. During the month of July, $ 150,000 of Barbie dolls and Toy Trucks were sold. There was $ 455 worth of redemptions in August.
Instructions
a) Prepare the journal entries to record all transactions related to the reward promotion.
b) Identify any liabilities that would be reported on the August 31, 2021, balance sheet.

Question

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The Answer of During the month of July, Happy Go Lucky Toy Company started a new promotion. The company offered to reward their customers for all sales made on Barbie dolls or Toy Trucks during the month of July. For each sale made, the customer will receive a 2% reward of the sales price, which can be redeemed on future purchases until December of the current year. Happy Go Lucky Toy Company estimates that 50% of the rewards will be redeemed. The stand-alone value of the rewards is $ 3,000. During the month of July, $ 150,000 of Barbie dolls and Toy Trucks were sold. There was $ 455 worth of redemptions in August.
Instructions
a) Prepare the journal entries to record all transactions related to the reward promotion.
b) Identify any liabilities that would be reported on the August 31, 2021, balance sheet.

During the Month of July, Happy Go Lucky Toy Company