On December 31, 2022, 28,800 points have been redeemed in exchange for purchases. In 2023, the management revised expectations and now expects 90% of the points to be redeemed. In 2023, the entity redeemed 9,000 points. 1. What amount of the transaction price should be allocated to the points? a. 1,800,000 b. 1,200,000 c. 1,020,000 d. 2. What amount should be reported as revenue earned from loyalty points for 2022? a. 576,000 b. 489,600 c. 510,000 d. 0 3. What amount should be reported as revenue earned from loyalty points for 2023? a. 224,400 b. 714,000 c. 170,000 d. 0
On December 31, 2022, 28,800 points have been redeemed in exchange for purchases. In 2023, the management revised expectations and now expects 90% of the points to be redeemed. In 2023, the entity redeemed 9,000 points. 1. What amount of the transaction price should be allocated to the points? a. 1,800,000 b. 1,200,000 c. 1,020,000 d. 2. What amount should be reported as revenue earned from loyalty points for 2022? a. 576,000 b. 489,600 c. 510,000 d. 0 3. What amount should be reported as revenue earned from loyalty points for 2023? a. 224,400 b. 714,000 c. 170,000 d. 0
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Problem 2-24 (IFRS)
Alyanna Company operates a customer loyalty program. The
entity grants program members loyalty points when they
spend a specified amount on purchases.
Program members can redeem the points for further
purchases. The points have no expiry date.
During 2022, the customer earned 60,000 points.
Management expects that 100% of these points will be
redeemed. The stand-alone selling price of each loyalty point
is estimated at P20.
The sales during 2022 amounted to P6,800,000 based on
stand-alone selling price.
On December 31, 2022, 28,800 points have been redeemed in
exchange for purchases.
In 2023, the management revised expectations and now
expects 90% of the points to be redeemed.
In 2023, the entity redeemed 9,000 points.
1. What amount of the transaction price should be allocated
to the points?
a. 1,800,000
b. 1,200,000
c. 1,020,000
d.
0
2. What amount should be reported as revenue earned from
loyalty points for 2022?
a. 576,000
b. 489,600
c. 510,000
d.
0
3. What amount should be reported as revenue earned from
loyalty points for 2023?
a. 224,400
b. 714,000
c. 170,000
d.
0
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