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Regal Department Store sells gift certificates, redeemable for store merchandise, that expire one year after their issuance. Regal has the following information pertaining to its gift certificates sales and redemptions:
Regal’s experience indicates that 10% of gift certificates sold will not be redeemed. In its December 31, year 2 balance sheet, what amount should Regal report as unearned revenue? A. $125,000 B. $112,500 C. $100,000 D. $ 50,000 |
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