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What amount should be reported as unearned revenue on loyalty points from 2021 sales for 2022?

What amount should be reported as unearned revenue on loyalty points from 2021 sales for 2022?

FINANCIAL ACCOUNTING
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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This lesson is under non-financial liabilities.

8. RHINO Corp. sells novelty items and grants its customers one reward point for each P500 sale. Each point is redeemable in the form of peso discount. The customer can earn 1 point for every P500 purchase from RHINO. During 2021, RHINO made P5,000,000 on which 10,000 were awarded. The fair value price for the points is P125. RHINO expects that only 50% of the points will be redeemed. During 2021, 4,000 points were redeemed by the customers. On 2022, there are 200 points redeemed from customers of 2021 sales. What amount should be reported as unearned revenue on loyalty points from 2021 sales for 2022?
Transcribed Image Text:8. RHINO Corp. sells novelty items and grants its customers one reward point for each P500 sale. Each point is redeemable in the form of peso discount. The customer can earn 1 point for every P500 purchase from RHINO. During 2021, RHINO made P5,000,000 on which 10,000 were awarded. The fair value price for the points is P125. RHINO expects that only 50% of the points will be redeemed. During 2021, 4,000 points were redeemed by the customers. On 2022, there are 200 points redeemed from customers of 2021 sales. What amount should be reported as unearned revenue on loyalty points from 2021 sales for 2022?
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