Dress Company is a retailer that sells clothing. The entity has launched a promotional campaign whereby if customers buy clothing with a single purchase of at least P4,000, the entity shall issue "30% discount coupons" on selected items. The coupons may be used for 3 months following the campaign. During the campaign, the entity sold clothing worth P5,400,000 and issued 500 "30% discount coupons". The entity expected that 80% of the coupons will be redeemed and customers using the coupons buy clothing at an average price of P5,000. 1. What amount should be reported as stand-alone selling price of the discount coupons? a. 750,000 b. 600,000 c. 400,000 d. 300,000 2. What amount of transaction price should be allocated to the discount coupons? a. 600,000 b. 500,000 c. 540,000 d. 270,000 3. What amount should be recorded initially as sales revenue? a. 4,860,000 b. 5,400,000 c. 2,560,000 d. 1,960,000 4. What amount should be recorded as sales revenue from the redemption of coupons? a. 2,500,000 b. 1,940,000 c. 1,750,000 d. 1,400,000
Dress Company is a retailer that sells clothing. The entity has launched a promotional campaign whereby if customers buy clothing with a single purchase of at least P4,000, the entity shall issue "30% discount coupons" on selected items. The coupons may be used for 3 months following the campaign. During the campaign, the entity sold clothing worth P5,400,000 and issued 500 "30% discount coupons". The entity expected that 80% of the coupons will be redeemed and customers using the coupons buy clothing at an average price of P5,000. 1. What amount should be reported as stand-alone selling price of the discount coupons? a. 750,000 b. 600,000 c. 400,000 d. 300,000 2. What amount of transaction price should be allocated to the discount coupons? a. 600,000 b. 500,000 c. 540,000 d. 270,000 3. What amount should be recorded initially as sales revenue? a. 4,860,000 b. 5,400,000 c. 2,560,000 d. 1,960,000 4. What amount should be recorded as sales revenue from the redemption of coupons? a. 2,500,000 b. 1,940,000 c. 1,750,000 d. 1,400,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
![Problem 2-22 (IFRS)
Dress Company is a retailer that sells clothing. The entity
has launched a promotional campaign whereby if customers
buy clothing with a single purchase of at least P4,000, the
entity shall issue "30% discount coupons" on selected items.
The coupons may be used for 3 months following the
campaign.
During the campaign, the entity sold clothing worth
P5,400,000 and issued 500 "30% discount coupons".
The entity expected that 80% of the coupons will be redeemed
and customers using the coupons buy clothing at an average
price of P5,000.
1. What amount should be reported as stand-alone selling
price of the discount coupons?
a. 750,000
b. 600,000
c. 400,000
d. 300,000
2. What amount of transaction price should be allocated to
the discount coupons?
a. 600,000
b. 500,000
c. 540,000
d. 270,000
3. What amount should be recorded initially as sales
revenue?
a. 4,860,000
b. 5,400,000
c. 2,560,000
d. 1,960,000
4. What amount should be recorded as sales revenue from
the redemption of coupons?
a. 2,500,000
b. 1,940,000
c. 1,750,000
d.
1,400,000
62](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F6d675a3c-da70-4135-b9aa-098dc5a81669%2Fef2066e5-642c-4bb9-a312-4ad28d235eeb%2Fzc2kax1_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Problem 2-22 (IFRS)
Dress Company is a retailer that sells clothing. The entity
has launched a promotional campaign whereby if customers
buy clothing with a single purchase of at least P4,000, the
entity shall issue "30% discount coupons" on selected items.
The coupons may be used for 3 months following the
campaign.
During the campaign, the entity sold clothing worth
P5,400,000 and issued 500 "30% discount coupons".
The entity expected that 80% of the coupons will be redeemed
and customers using the coupons buy clothing at an average
price of P5,000.
1. What amount should be reported as stand-alone selling
price of the discount coupons?
a. 750,000
b. 600,000
c. 400,000
d. 300,000
2. What amount of transaction price should be allocated to
the discount coupons?
a. 600,000
b. 500,000
c. 540,000
d. 270,000
3. What amount should be recorded initially as sales
revenue?
a. 4,860,000
b. 5,400,000
c. 2,560,000
d. 1,960,000
4. What amount should be recorded as sales revenue from
the redemption of coupons?
a. 2,500,000
b. 1,940,000
c. 1,750,000
d.
1,400,000
62
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