Carla Vista Inc. has a customer loyalty program that rewards a customer with 1 customer loyalty point for every $10 of purchases. Each point is redeemable for a $3 discount on any future purchases. On July 2, 2025, customers purchase products for $390,000 (with a cost of $210,600) and earn 39,000 points redeemable for future purchases. Carla Vista expects 34,300 points to be redeemed. Carla Vista estimates a standalone selling price of $2.50 per point (or $97,500 total) on the basis of the likelihood of redemption. The points provide a material right to customers that they would not receive without entering into a contract. As a result, Carla Vista concludes that the points are a separate performance obligation. (a) Your answer is incorrect. Determine the transaction price for the product and the customer loyalty points. Product purchases Loyalty points Total transaction price $ $ $

Carla Vista Inc. has a customer loyalty program that rewards a customer with 1 customer loyalty point for every $10 of purchases. Each point is redeemable for a $3 discount on any future purchases. On July 2, 2025, customers purchase products for $390,000 (with a cost of $210,600) and earn 39,000 points redeemable for future purchases. Carla Vista expects 34,300 points to be redeemed. Carla Vista estimates a standalone selling price of $2.50 per point (or $97,500 total) on the basis of the likelihood of redemption. The points provide a material right to customers that they would not receive without entering into a contract. As a result, Carla Vista concludes that the points are a separate performance obligation. (a) Your answer is incorrect. Determine the transaction price for the product and the customer loyalty points. Product purchases Loyalty points Total transaction price $ $ $

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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