Is program memb no expiry date, ane earned 80,000 poi stand-alone selling
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question

Transcribed Image Text:MARYJANE, IN., a grocery business, operates a customer loyalty program. MARYJANE grants
its program members points when they spend a specified amount of purchases. The points have
no expiry date, and they can use the points for further purchases. During 2021, the customers
earned 80,000 points, but management expects that 75% of these points will be redeemed. The
stand-alone selling price of each loyalty point is estimated at Php 20. The sales during 2021
amounted to Php 6,800,000 on stand-alone selling price.
On December 31, 2021, 28,800 points have been redeemed. In 2022, the management revised
its expectations and now expects 85% of the points to be redeemed. In 2022, the 12,000 points
were redeemed.
a. 1,367,481
b. 1,200,000
c. 1,020,000
d. 1,295,238
What amount of the transaction price
should be allocated to the groceries?
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