[Solved] Colombo Coffee Sells Gift Cards That Can Be Used at Its

Question 288
Essay

Colombo Coffee sells gift cards that can be used at its 55 branches.During 2015,customers purchased $25,000 of gift cards,of which $3,000 were redeemed during 2016.It is estimated that a balance of $1,500 of cards sold in 2015 remains unused as of the end of 2016,and Colombo determines that this amount will never be redeemed,based on historical experience.During 2016,Colombo further sold $32,000 of gift cards,of which $26,000 were redeemed and $6,000 remain unused but may be used by customer in 2017. Required: How much gift card revenue should Colombo recognize in 2016?

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