Problem 2Erika Company operates lovaity program. The entity grants loyalty points for goods purchased. Theloyalty points van be used by costumer in exchange for goods of the entity. The points have no expirydate.During 2021, the entity issued 50,000 award credits and expects that 80% of these award credits shall beredeerned. The Total Stand-alone selling price of the award credits granted is reliably measured at P1,00,000 in 2021, the entity sold goods to costumers for a total consideration of P7, 000,000 based onstand-alone selling price.« Th iThe award credits redeemed and the total award credits expected to be redeerned each year:RedeemedExpected to be Redeemed202115,0007,9502,55015.000B0%202285%85%90%202320241. What amount should be reported as revenue points for 20217A. 328, 125B. 875,000C. 700,000D. 175,0002. What amount should be reported as revenue frorn points for 2022?A. 472, 500В. 4А, 375C. 415, 625D. 236, 2503. What amount shauld be reported as revenue from points for 2o23?A 525, 000B. 350,000C. 52, 500D. 78,7504. What amount should be reported as revenue from points for 2024?A 787,500B. 183,750С. 131,250D. 262,500

Solution Revenue is the total amount of income generated by the sale of goods or services related to…

Problem 2 Erika Company operates lovalty program. The entity grants loyalty points for goods purchased. The loyalty points van be used by costumer in exchange for goods of the entity. The points have no expiry date. The During 2021, the entity issued 50,000 award credits and expects that 80% of these award credits shall be redeerned. The Total Stand-alone selling price of the award credits granted is reliably measured at P1, 00,000 in 2021, the entity sold goods to costumers for a total consideration of P7, 000,000 based on stand-alone selling price. The avward credits redeemed and the total award credits expected to be redeerned each year: Redeemed Expected to be Redeemed 2021 15,000 7,950 2,550 15.000 80% 2022 85% 2023 85% 90% 2024 1. What amount should be reported as revenue points for 20217 A. 328, 125 B. 875,000 C. 700,000 D. 175,000 2. What amount should be reported as revenue fron points for 2022? A. 472, 500 B. 144, 375 C. 415, 625 D. 236, 250 3. What amount should be reported as revenue from points for 2023? A. 525, 000 B. 350,000 C. 52, 500

Problem 2 Erika Company operates lovalty program. The entity grants loyalty points for goods purchased. The loyalty points van be used by costumer in exchange for goods of the entity. The points have no expiry date. The During 2021, the entity issued 50,000 award credits and expects that 80% of these award credits shall be redeerned. The Total Stand-alone selling price of the award credits granted is reliably measured at P1, 00,000 in 2021, the entity sold goods to costumers for a total consideration of P7, 000,000 based on stand-alone selling price. The avward credits redeemed and the total award credits expected to be redeerned each year: Redeemed Expected to be Redeemed 2021 15,000 7,950 2,550 15.000 80% 2022 85% 2023 85% 90% 2024 1. What amount should be reported as revenue points for 20217 A. 328, 125 B. 875,000 C. 700,000 D. 175,000 2. What amount should be reported as revenue fron points for 2022? A. 472, 500 B. 144, 375 C. 415, 625 D. 236, 250 3. What amount should be reported as revenue from points for 2023? A. 525, 000 B. 350,000 C. 52, 500

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter8: Current And Contingent Liabilities

Section: Chapter Questions

Problem 78BPSB

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