Hi-Mart Hi-Mart, a grocery retailer situated in Manila, operates a customer loyalty program. The entity grants program members with loyalty points every time they spend a specific amount on groceries. Program members can redeem the points for further purchases. The points have no expiry date. In 2X18, the sales amounted to P7,000,000 based on stand-alone selling price. During the same year, the entity granted 10,000 points, but the management expected that only 80% or 8,000 points would be redeemed. The stand-alone selling price of each loyalty point is estimated at P100. On December 31, 2X18, 4 800 points have been redeemed. In 2X19, the management revised its expectations and now expected that 90% or 9,000 points would be redeemed altogether. During 2x19, the entity redeemed 2.400 points 1. What amount should be reported as sales revenue, including the revenue earned from points for 2X18? 2. What is the revenue earned from loyalty points for 2X19?
Hi-Mart Hi-Mart, a grocery retailer situated in Manila, operates a customer loyalty program. The entity grants program members with loyalty points every time they spend a specific amount on groceries. Program members can redeem the points for further purchases. The points have no expiry date. In 2X18, the sales amounted to P7,000,000 based on stand-alone selling price. During the same year, the entity granted 10,000 points, but the management expected that only 80% or 8,000 points would be redeemed. The stand-alone selling price of each loyalty point is estimated at P100. On December 31, 2X18, 4 800 points have been redeemed. In 2X19, the management revised its expectations and now expected that 90% or 9,000 points would be redeemed altogether. During 2x19, the entity redeemed 2.400 points 1. What amount should be reported as sales revenue, including the revenue earned from points for 2X18? 2. What is the revenue earned from loyalty points for 2X19?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Case No. 1: Hi-Mart
Hi-Mart, a grocery retailer situated in Manila, operates a customer loyalty program. The
entity grants program members with loyalty points every time they spend a specific
amount on groceries. Program members can redeem the points for further purchases.
The points have no expiry date. In 2X18, the sales amounted to P7,000,000 based on
stand-alone selling price. During the same year, the entity granted 10,000 points, but
the management expected that only 80% or 8,000 points would be redeemed. The
stand-alone selling price of each loyalty point is estimated at P100.
On December 31, 2X18, 4 800 points have been redeemed. In 2X19, the management
revised its expectations and now expected that 90% or 9,000 points would be redeemed
altogether. During 2x19, the entity redeemed 2.400 points
1. What amount should be reported as sales revenue, including the revenue earned
from points for 2X18?
2. What is the revenue earned from loyalty points for 2X19?
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