[Solved] Moretti Department Store Sells Gift Cards That Expire Three Years

Question 289
Question 289

Moretti Department Store sells gift cards that expire three years from the date of purchase.During 2014,Moretti sold $50,000 of gift cards,of which $1,500 were redeemed during 2016.At the end of 2016,it is estimated that approximately $800 of the 2014 balance remains unused,and Moretti concludes that it will never be redeemed.Moretti sold another $55,000 of gift cards in 2015,of which $22,000 were redeemed in 2016,and $60,000 of gift cards in 2016,of which $40,000 were redeemed in 2016. Required: How much revenue with respect to gift cards should Moretti recognize in 2016?

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