How much is the expense to be recognized by ABC in 2021?
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ABC Company participates in a customer loyalty program operated by YG Corporation where it grants 1 point for every P200 spent on its oil products. Accumulated points by customers from ABC may be used to settle part or in full any merchandise purchased from YG. ABC pays YG P1 for each point redeemed. In 2021, total sales of the ABC amounted to P10,000,000. Only 45% of the 100% expected total points granted were redeemed by the customers from YG Corporation which was used to fully settle the purchase of goods during the year.
How much is the expense to be recognized by ABC in 2021?
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- CoolShoes sells its elite tennis shoes to sports retailers throughout the country. When introducing its new RF17 shoes that sell for 125 per pair, the company includes a 15 rebate form. The rebate form can be used when the customer ultimately purchases the shoes. CoolShoes sells 100 pairs of shoes and estimates that 80% of the rebate forms will be returned by customers for a rebate. Determine the transaction price that CoolShoes should use when recognizing revenue from sale of one pair of the RF17 shoe.Rix Company sells home appliances and provides installation and service for its customers. On April 1, 2019, a customer purchased a dishwasher that Rix normally sells for 1,000. In addition, the customer purchased the installation service and a 3-year service contract, with stand-alone selling prices of 200 and 400, respectively. Because the customer purchased all three items as a bundle, Rix charged the customer 1,400. Required: 1. How should the transaction price be allocated among the products? 2. Prepare the journal entries to recognize revenue related to each product in 2019.Assume that Kwek-kwek Corp. participates in a customer loyalty program operated by Suka Corporation where it grants 1 point for every P200 spent on its oil products. Accumulated points by customers from Kwek-kwek Corp. may be used to settle part or in full any merchandise purchased from Suka Corporation. Kwek-kwek Corp. pays Suka P1 for each point redeemed. In 2021, total sales of the Kwek-kwek Corp. amounted to P10,000,000. Only 45% of the 100% expected total points granted were redeemed by the customers from Suka Corporation which was used to fully settle the purchase of goods during the year. How much is the expense to be recognized by Kwek-kwek in 2021 related to the transaction?
- 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
- James Company has an arrangement with with Jorge Company that operates a customer loyalty program. The entity grants loyalty points of Jorge Company when they spend a specified amount on purchases. Program members can redeem their points with Jorge Company. The points have no expiry date. During 2020, the customers earned 60,000 points. The stand-alone selling price of each loyalty point is estimated at P20. The sales during 2020 amounted to P6,800,000 based on stand-alone selling price. According to Jorge Company: On December 31, 2020, 28,800 points have been redeemed in exchange for purchases. In 2021, customers have redeemed 9,000 points. How much is the revenue to be recognized by James in 2020?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. ₱ 45,000ABC Company runs a department store and grants loyalty awards to its customers. For every P 100 purchase made by the customer, the customer receives a credit of 5 points equivalent to P 5. The accumulated points can be used by the customer to as part or full payment of for merchandise purchased in the future.During the year 2019, the company made sales of P 10,000,000. The fair value of the points is equivalent to the total number of points awarded during the year. For the year 2019, ABC expects that 70,000 points will be redeemed but only 65,000 points were redeemed relating to 2019 sales. For the year 2020, an additional 20,000 points were redeemed and ABC revised its estimate that the total number of points that will be redeemed is 90,000 points.What amount of liability must be presented in the statement of financial position relating to customer loyalty awards at December 31,2020? How much revenue is recognized as a result of the redemption of points for the year 2019? and What…
- 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%…During 2021, Truffle Company sold 500,000 boxes of hotcakes under a new sales promotional program. Each box contains one coupon, which when submitted with P16, entitles the customer to a baking pan. Truffle pays P20 per pan and P2 for handling and shipping. Truffle estimate that 80% of the coupons will be redeemed, even though only 300,000 coupons had been processed during 2021. What amount should Truffle report as a liability for unredeemed coupons at December 31, 2021?During 2021, SUGA Company sold 485,000 boxes of cereals under a new sales promotional program. Each box contains one coupon, which entitles the customer to a premium that cost the company ₱75. Five coupons plus a remittance of ₱20 must be presented by the customer to receive a premium. SUGA estimated that 85% of the coupons will be redeemed. Actual premiums redeemed were 5,000 units. Additional information disclosed that ₱10 per premium is incurred for storage and distribution. Compute for the liability for the unredeemed coupons.
