13) In its 10-Q for the third quarter of 2019, Starbucks Corporation disclosed the following...
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13) In its 10-Q for the third quarter of 2019, Starbucks Corporation disclosed the following information about its stored value cards: Stored Value Cards: Historically, the majority of stored value cards are redeemed within one year... Based on historical redemption rates, a portion of stored value cards is not expected to be redeemed and will be recognized as breakage over time in proportion to stored value card redemptions. The redemption rates are based on historical redemption patterns for each market, including the timing and business channel in which the card was activated, and unclaimed property laws, if applicable... Breakage is recognized as company-operated stores and licensed stores revenue within the condensed consolidated statement of earnings. For the quarter and three quarters ended June 30, 2019, we recognized breakage revenue of $28.9 million and $101.2 million in company-operated store revenues and $3.5 million and $12.8 million in licensed store revenues, respectively. When Starbucks Corporation records breakage revenue, in what account is the corresponding debit recorded 1) Unearned revenue 2) Breakage expense 3) Customer deposits 4) Loss contingency
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