11. PEANUTS Company, a grocery retailer operates a customer loyalty program. It grants program members loyalty points when they spend a specified amount of groceries. Program members can redeem the points for further groceries. The points have no expiry date. During the year 2020, the entity grants 100,000 points, but management expects that only 80,000 points will be redeemed. The management of PEANUTS estimates the fair value of each loyalty point to be ₱1 and defers revenue in the amount of ₱100,000. During the year 2020, the company had redeemed 40,000 points. But during the year 2021, the management revises their expectation, it now expects to redeem 90,000 points. In 2021, the company redeemed 45,000 points. What amount of revenue from the loyalty program should PEANUTS recognize for the year ended December 31, 2021? a. ₱ 20,000 b. ₱ 25,000 c. ₱ 50,000 d. ₱ 45,000

11. PEANUTS Company, a grocery retailer operates a customer loyalty program. It grants program members loyalty points when they spend a specified amount of groceries. Program members can redeem the points for further groceries. The points have no expiry date. During the year 2020, the entity grants 100,000 points, but management expects that only 80,000 points will be redeemed. The management of PEANUTS estimates the fair value of each loyalty point to be ₱1 and defers revenue in the amount of ₱100,000. During the year 2020, the company had redeemed 40,000 points. But during the year 2021, the management revises their expectation, it now expects to redeem 90,000 points. In 2021, the company redeemed 45,000 points. What amount of revenue from the loyalty program should PEANUTS recognize for the year ended December 31, 2021? a. ₱ 20,000 b. ₱ 25,000 c. ₱ 50,000 d. ₱ 45,000

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter17: Advanced Issues In Revenue Recognition

Section: Chapter Questions

Problem 6MC

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PEANUTS Company, a grocery retailer operates a customer loyalty program. It grants program members loyalty points when they spend a specified amount of groceries. Program members can redeem the points for further groceries. The points have no expiry date. During the year 2020, the entity grants 100,000 points, but management expects that only 80,000 points will be redeemed. The management of PEANUTS estimates the fair value of each loyalty point to be ₱1, and defers revenue in the amount of ₱100,000. During the year 2020, the company had redeemed 40,000 points. But during the year 2021, the management revises their expectation, it now expects to redeem 90,000 points. In 2021, the company redeemed 45,000 points. What amount of revenue from loyalty program should PEANUTS recognize for the year ended December 31, 2021? * ₱ 50,000 ₱ 20,000 ₱ 25,000 ₱ 45,000
PEANUTS Company, a grocery retailer operates a customer loyalty program. It grants program members loyalty points when they spend a specified amount of groceries. Program members can redeem the points for further groceries. The points have no expiry date. During the year 2020, the entity grants 100,000 points, but management expects that only 80,000 points will be redeemed. The management of PEANUTS estimates the fair value of each loyalty point to be ₱1, and defers revenue in the amount of ₱100,000. During the year 2020, the company had redeemed 40,000 points. But during the year 2021, the management revises their expectation, it now expects to redeem 90,000 points. In 2021, the company redeemed 45,000 points. What amount of revenue from loyalty program should PEANUTS recognize for the year ended December 31, 2021?
XZ Company, a grocery retailer operates a customer loyalty program. It grants program members loyalty points when they spend a specified amount of groceries. Program members can redeem the points for further groceries. The points have no expiry date. During the year 2020, the entity grants 100,000 points, but management expects that only 80,000 points will be redeemed. The management of XZ estimates the fair value of each loyalty point to be ₱1, and defers revenue in the amount of ₱100,000. During the year 2020, the company had redeemed 40,000 points. But during the year 2021, the management revises their expectation, it now expects to redeem 90,000 points. In 2021, the company redeemed 45,000 points. What amount of revenue from loyalty program should XZ recognize for the year ended December 31, 2021? a. ₱ 20,000 b. ₱ 25,000 c. ₱ 50,000 d. ₱ 45,000
ABC Company, a department store operates a customer loyalty program.The entity grants program members loyalty points when they spend a specified amount on their products. Program members can redeem the points for future purchases.The points have no expiry date. During 2020, the sales amounted to P 10,000,000 and the entity grants 5 points for every P 100 purchase. Management expects that only 70% of the points will be redeemed. Fair values of products sold and the reward points for the year were P 9,000,000 and P 1,000,000, respectively.As of December 31, 2020, half of the total points granted have already been redeemed. In 2021, the management revised its expectations to 90% of the points will be redeemed. As of December 31, 2021, there is a redemption of 25% of the remaining points.What amount should be reported as revenue earned from loyalty points in 2020?
ABC Company, a department store operates a customer loyalty program.The entity grants program members loyalty points when they spend a specified amount on their products. Program members can redeem the points for future purchases.The points have no expiry date. During 2020, the sales amounted to P 10,000,000 and the entity grants 5 points for every P 100 purchase. Management expects that only 70% of the points will be redeemed. Fair values of products sold and the reward points for the year were P 9,000,000 and P 1,000,000, respectively.As of December 31, 2020, half of the total points granted have already been redeemed. In 2021, the management revised its expectations to 90% of the points will be redeemed. As of December 31, 2021, there is a redemption of 25% of the remaining points.What amount should be reported as revenue earned from loyalty points in 2020?To input answers, kindly follow the sample format below(no peso sign, with comma, no space):ex. 100,000Failure to follow the…
EM Company, a grocery retailer, operates a customer loyalty program. The entity grants program members loyalty points when they spend a specified amount on groceries. Program members can redeem the points for further groceries. The points have no expiry date. During2019, the sales amounted to P7,000,000 and the entity have granted 10,000points. Management expects that only 80% of the points will be redeemed. The cost of each loyalty point is P100. As of December 31, 2019, 4,800 points have already been redeemed. In2020, the management revised its expectations to 90% of the points will be redeemed. As of December 31, 2020, the entity redeemed 2,400 points. What amount should be reported as revenue earned from loyalty points in 2020? A.P700,000B.P210,000C.P175,000D.P200,000
An entity, a grocery retailer, operates a customer loyalty program. The entity grants program members loyalty points when they spend s specified amount on groceries. The points have no expiry date. During 2022, the sales amounted to 7,000,000.00 based on stand -alone selling price. During the year, the entity granted 10,000 points. But management expected that only 80% or 8,000 points will be redeemed. The stand alone selling price of each loyalty points is estimated at P100.On December 31, 2022, 4,800 points have been redeemed. In 2023, management revised its expectations and now expected that 90% or 9,000.00 will be redeemed altogether. During 2021, the entity redeemed 2,400 points.What amount should be reported as sales revenue including the revenue earned from points for 2022? What is the revenue earned from loyalty points for 2023?
GoodBuy sells gift cards redeemable for GoodBuy products either in store or online. During 2021, GoodBuy sold $1,000,000 of gift cards, and $840,000 of the gift cards were redeemed for products. As of December 31, 2021, $30,000 of the remaining gift cards had passed the date at which GoodBuy concludes that the cards will never be redeemed. How much gift card revenue should GoodBuy recognize in 2021?
Zilong Company operates a customer loyalty program. The entity grants program members loyalty points when they spend a specified amount on purchases. Program members can redeem the points for further purchases. The points have no expiry date. During 2021 the entity granted 80,000 points. Management expects that 90% of these points will be redeemed. The fair value of each loyalty point is estimated at P20. The sales during 2021 amounted to P9,000,000 including loyalty points. On December 31, 2021, 28,800 points have been redeemed in exchange for purchases. In 2022 the management revised its expectations and expects 85% of the points to be redeemed altogether. During 2022, the entity redeemed 12,000 points. What is the revenue earned from loyalty points for the year ended December 31, 2021?
62 In August 2021, Commonlo Corp. commits to selling 100 of its merchandise to M&H Co. for P30,000 (P300 per product). The merchandise is to be delivered to M&H over the next 6 months. After 60 merchandises were delivered, the contract is modified and Commonlo promises to deliver 80 more products for an additional P21,600 (P270 per station). At year-end, Commonlo delivered an additional 90 products. All sales are cash on delivery. How much revenue will be recognized on the contract for the year 2021?
Cullumber Bakery began selling gift cards in 2025. Based on industry norms, they expect that 40% of the gift cards will not be redeemed. In 2025, the bakery sold gift cards with a value of $1000. During that period, gift cards with a value of $250 were redeemed. The amount of revenue that Cullumber will recognize in 2025 with regard to the gift cards is
3. Erika Company operates a customer loyalty program. The entity grants loyalty points for goods purchased. The loyalty points can be used by the customers in exchange for goods of the entity. The points have no expiry date. During 2020, the entity issued 50,000 award credits and expects that 80% of these award credits shall be redeemed. The stand-alone selling price of the award credits granted is reliably measured at P1,000,000. In 2020, the entity sold goods to customers for a total consideration of P7,000,000 based on stand-alone selling price. The award credits redeemed and the total award credits expected to be redeemed each year are as follows: Redeemed Expected to be Redeemed 2020 15,000 80% 2021 7,950 85% 2022 2,550 85% 2023 15,000 90% Required: Prepare journal entries from 2020 to 2023.