ABC Department store grants loyalty awards to its customers wherein for every P 100 purchase made, the customer receives 5 points equivalent to P 5. The points accumulated by the customer may be used as part or full payment for merchandise purchases in the future. During 2018, total sales amounted to P 10,000,000. Fair values of the merchandise sold and reward points are P 9,500,000 and P 500,000, respectively. At the end 2018, 60% out of 90% have been redeemed by the customers. At the end 2019, an additional 20% have been redeemed and the revised estimate of total points expected to be redeemed was now at 95%. In accordance with IFRS 15, how much revenue was recognized for the year 2018 related to loyalty awards redeemed by the customers? P 500,000 P 375,000 P 46,052.63 P 69,444.44
ABC Department store grants loyalty awards to its customers wherein for every P 100 purchase made, the customer receives 5 points equivalent to P 5. The points accumulated by the customer may be used as part or full payment for merchandise purchases in the future. During 2018, total sales amounted to P 10,000,000. Fair values of the merchandise sold and reward points are P 9,500,000 and P 500,000, respectively. At the end 2018, 60% out of 90% have been redeemed by the customers. At the end 2019, an additional 20% have been redeemed and the revised estimate of total points expected to be redeemed was now at 95%. In accordance with IFRS 15, how much revenue was recognized for the year 2018 related to loyalty awards redeemed by the customers? P 500,000 P 375,000 P 46,052.63 P 69,444.44
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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ABC Department store grants loyalty awards to its customers wherein for every P 100 purchase made, the customer receives 5 points equivalent to P 5. The points accumulated by the customer may be used as part or full payment for merchandise purchases in the future. During 2018, total sales amounted to P 10,000,000. Fair values of the merchandise sold and reward points are P 9,500,000 and P 500,000, respectively. At the end 2018, 60% out of 90% have been redeemed by the customers. At the end 2019, an additional 20% have been redeemed and the revised estimate of total points expected to be redeemed was now at 95%.
In accordance with IFRS 15, how much revenue was recognized for the year 2018 related to loyalty awards redeemed by the customers?
In accordance with IFRS 15, how much revenue was recognized for the year 2018 related to loyalty awards redeemed by the customers?
P 500,000
P 375,000
P 46,052.63
P 69,444.44
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