1. What amount should be reported as sales revenue including the revenue earned from points for 2020?2. What is the revenue earned from loyalty points for 2021? Arianne Company, a grocery retailer, operates a customer loyalty program. Theentity grants program members loyalty points when they spend a specified amount ongroceries.Program members can redeem the points for further groceries. The points have noexpiry date.During 2020, the sales amounted to P7,000,000 based on stand-alone selling price.During the year, the entity granted 10,000 points. But management expected thatonly 80% or 8,000 points will be redeemed.The stand-alone selling price of each loyalty point is P100.On December 31, 2020, 4,800 points have been redeemed.In 2021, management revised its expectations and now expected that 90% or 9,000points will be redeemed altogether.During 2021, the entity redeemed 2,400 points.

Revenue Recognition in Loyalty Programme Most of the companies are offering the loyalty programs to…

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What amount should be reported as sales revenue including the revenue earned from points for 2020? 2. What is the revenue earned from loyalty points for 2021?

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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