Problem 2Erika Company operates lovaity program. The entity grants loyalty points for goods purchased. Theloyalty points van be used by costumer in exchange for goods of the entity. The points have no expirydate.During 2021, the entity issued 50,000 award credits and expects that 80% of these award credits shall beredeerned. The Total Stand-alone selling price of the award credits granted is reliably measured at P1,00,000 in 2021, the entity sold goods to costumers for a total consideration of P7, 000,000 based onstand-alone selling price.« Th iThe award credits redeemed and the total award credits expected to be redeerned each year:RedeemedExpected to be Redeemed202115,0007,9502,55015.000B0%202285%85%90%202320241. What amount should be reported as revenue points for 20217A. 328, 125B. 875,000C. 700,000D. 175,0002. What amount should be reported as revenue frorn points for 2022?A. 472, 500В. 4А, 375C. 415, 625D. 236, 2503. What amount shauld be reported as revenue from points for 2o23?A 525, 000B. 350,000C. 52, 500D. 78,7504. What amount should be reported as revenue from points for 2024?A 787,500B. 183,750С. 131,250D. 262,500

Solution Revenue is the total amount of income generated by the sale of goods or services related to…

Problem 2 Erika Company operates lovalty program. The entity grants loyalty points for goods purchased. The loyalty points van be used by costumer in exchange for goods of the entity. The points have no expiry date. The During 2021, the entity issued 50,000 award credits and expects that 80% of these award credits shall be redeerned. The Total Stand-alone selling price of the award credits granted is reliably measured at P1, 00,000 in 2021, the entity sold goods to costumers for a total consideration of P7, 000,000 based on stand-alone selling price. The avward credits redeemed and the total award credits expected to be redeerned each year: Redeemed Expected to be Redeemed 2021 15,000 7,950 2,550 15.000 80% 2022 85% 2023 85% 90% 2024 1. What amount should be reported as revenue points for 20217 A. 328, 125 B. 875,000 C. 700,000 D. 175,000 2. What amount should be reported as revenue fron points for 2022? A. 472, 500 B. 144, 375 C. 415, 625 D. 236, 250 3. What amount should be reported as revenue from points for 2023? A. 525, 000 B. 350,000 C. 52, 500

Problem 2 Erika Company operates lovalty program. The entity grants loyalty points for goods purchased. The loyalty points van be used by costumer in exchange for goods of the entity. The points have no expiry date. The During 2021, the entity issued 50,000 award credits and expects that 80% of these award credits shall be redeerned. The Total Stand-alone selling price of the award credits granted is reliably measured at P1, 00,000 in 2021, the entity sold goods to costumers for a total consideration of P7, 000,000 based on stand-alone selling price. The avward credits redeemed and the total award credits expected to be redeerned each year: Redeemed Expected to be Redeemed 2021 15,000 7,950 2,550 15.000 80% 2022 85% 2023 85% 90% 2024 1. What amount should be reported as revenue points for 20217 A. 328, 125 B. 875,000 C. 700,000 D. 175,000 2. What amount should be reported as revenue fron points for 2022? A. 472, 500 B. 144, 375 C. 415, 625 D. 236, 250 3. What amount should be reported as revenue from points for 2023? A. 525, 000 B. 350,000 C. 52, 500

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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Problem 2-20 (IFRS) William Company operates a customer loyalty program.The entity grants loyalty points for goods purchased. The loyalty points can be used by the customers in exchange for goods of the entity. The points have no expiry date. During 2020,the entity issued 100,000 award credits and expects that 80% of these award credits shall be redeemed. The total stand-alone selling price of the award credits granted is reliably measured at P2,000,000. In 2020, the entity sold goods to customers for a total consideration of P8,000,000 based on stand-alone selling price. The award credits redeemed and the total award credits expected to be redeemed each year are as follows: Redeemed Expected to be redeemed 2020 30,000 80% 2021 15,000 1. What is the revenue from points for 2020? a. 1,600,000 b 1,500,000 C. 600,000 d 480,000 2. What is the revenue from points for 2021? a.240,000 B.200,000 C. 120,000 d 0
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Topic: Premium Liability Problem 2-20 William Company operates a customer loyalty program. The entity grants loyalty points for goods purchased. The loyalty points can be used by the customers in exchange for goods of the entity. The points have no expiry date. During 2020, the entity issued 100,000 award credits and expects that 80% of these award credits shall be redeemed. The total stand-alone selling price of the award credits granted is reliably measured at P2,000,000. In 2020, the entity sold goods to customers for a total consideration of P8,000,000 based on stand-alone selling price. The award credits redeemed and the total award credits expected to be redeemed each year are as follows Redeemed Expected to be redeemed 2020 30,000 80% 2021 15,000 90% Solve for the following: The revenue from points for 2020 The revenue from points for 2021
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