Problem:
CircuitTown commenced a gift card program in January 2013 and sold $12,900 of gift cards in January, $19,950 in February, and $19,800 in March of 2013 before discontinuing further gift card sales. During 2013, gift card redemptions were $8,400 for the January gift cards sold, $5,700 for the February cards, and $5,550 for the March cards. CircuitTown considers gift cards to be "broken" (not redeemable) 10 months after sale. (Assume that gift-card sales occur halfway through each month on average.) (March gift cards will expire on January, 15, 2014.)
Required:
Question 1: How much revenue will CircuitTown recognize with respect to March gift card sales during 2013?
Question 2: What liability for unearned revenue associated with gift card sales would CircuitTown show as of December 31, 2013?
Note: Please provide through step by step calculations.