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3. What amount should be reported as sales revenue in 2022? a. 6,000,000 b. 3,000,000 c. 4,800,000 d. 2,400,000 4. What amount should be reported as sales revenue from the delivery of free products in 2023? a. 900,000 b. 600,000 c. 480,000 d. 720,000

3. What amount should be reported as sales revenue in 2022? a. 6,000,000 b. 3,000,000 c. 4,800,000 d. 2,400,000 4. What amount should be reported as sales revenue from the delivery of free products in 2023? a. 900,000 b. 600,000 c. 480,000 d. 720,000

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Problem 2-21 (IAA) Choco Company, a high street chain, is offering a promotion whereby a customer who purchases three boxes of chocolates at P200 per box in a single transaction receives a coupon for one free box of chocolates if the customer fills out a request form and mails it before a set expiration date. It is expected that 75% of the coupons will be redeemed. During 2022, the entity sold 30,000 boxes of chocolates at P200 per box or P6,000,000. During 2023, the entity delivered 6,000 additional free boxes of chocolates to the customers. 1. What amount should be reported as stand-alone selling price of the free product coupons? a. 1,500,000 b. 2,000,000 750,000 500,000 C. d. 2. What amount of the transaction price should be allocated to the free product coupons? a. 1,000,000 b. 1,200,000 C. d. 500,000 600,000 3. What amount should be reported as sales revenue in 2022? a. 6,000,000 b. 3,000,000 c. 4,800,000 d. 2,400,000 4. What amount should be reported as sales revenue from the delivery of free products in 2023? a. 900,000 b. 600,000 c. 480,000 d. 720,000
Transcribed Image Text:Problem 2-21 (IAA) Choco Company, a high street chain, is offering a promotion whereby a customer who purchases three boxes of chocolates at P200 per box in a single transaction receives a coupon for one free box of chocolates if the customer fills out a request form and mails it before a set expiration date. It is expected that 75% of the coupons will be redeemed. During 2022, the entity sold 30,000 boxes of chocolates at P200 per box or P6,000,000. During 2023, the entity delivered 6,000 additional free boxes of chocolates to the customers. 1. What amount should be reported as stand-alone selling price of the free product coupons? a. 1,500,000 b. 2,000,000 750,000 500,000 C. d. 2. What amount of the transaction price should be allocated to the free product coupons? a. 1,000,000 b. 1,200,000 C. d. 500,000 600,000 3. What amount should be reported as sales revenue in 2022? a. 6,000,000 b. 3,000,000 c. 4,800,000 d. 2,400,000 4. What amount should be reported as sales revenue from the delivery of free products in 2023? a. 900,000 b. 600,000 c. 480,000 d. 720,000
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