Moretti Department Store sells gift cards that expire three years from the date of purchase. During 2016, Moretti sold $50,000 of gift cards, of which $1,500 were redeemed during 2018. At the end of 2018, it is estimated that approximately $800 of the 2016 balance remains unused, and Moretti concludes that it will never be redeemed. Moretti sold another $55,000 of gift cards in 2017, of which $22,000 were redeemed in 2018, and $60,000 of gift cards in 2018, of which $40,000 were redeemed in 2018.
Required:
How much revenue with respect to gift cards should Moretti recognize in 2018?

Question

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The Answer of Moretti Department Store sells gift cards that expire three years from the date of purchase. During 2016, Moretti sold $50,000 of gift cards, of which $1,500 were redeemed during 2018. At the end of 2018, it is estimated that approximately $800 of the 2016 balance remains unused, and Moretti concludes that it will never be redeemed. Moretti sold another $55,000 of gift cards in 2017, of which $22,000 were redeemed in 2018, and $60,000 of gift cards in 2018, of which $40,000 were redeemed in 2018.
Required:
How much revenue with respect to gift cards should Moretti recognize in 2018?

Moretti Department Store Sells Gift Cards That Expire Three Years