0 sale. Each point is redeemable in the form of peso discount. The customer can earn 1 point for every P500 purchase from ABC. During 2021, ABC made P5,000,000 on which 10,000 were awarded, The fair value price for the points is P125. ABC expects that only 50% of the points will be redeemed. During 2021, 4,000 poin
0 sale. Each point is redeemable in the form of peso discount. The customer can earn 1 point for every P500 purchase from ABC. During 2021, ABC made P5,000,000 on which 10,000 were awarded, The fair value price for the points is P125. ABC expects that only 50% of the points will be redeemed. During 2021, 4,000 poin
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
ABC Corp. sells novelty items and grants its customers one reward point for each
P500 sale. Each point is redeemable in the form of peso discount. The customer can
earn 1 point for every P500 purchase from ABC.
During 2021, ABC made P5,000,000 on which 10,000 were awarded, The fair value
price for the points is P125. ABC expects that only 50% of the points will be
redeemed.
During 2021, 4,000 points were redeemed by the customers. On 2022, there are 200
points redeemed from customers of 2021 sales.
What amount should be reported as unearned revenue on loyalty points from 2021
sales for 2022?
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