Chapter 18, Problem 7P

To determine

Sales revenue: It is the overall income that is earned during the selling of goods and services after deducting returns. It is also known as Net sales revenue.

Cost of goods sold: It is the direct amount used for the production of goods and services. These costs may include the cost of materials and labor cost used in the production of goods and services.

Revenue recognition: GAAP (Generally accepted accounting principle) states that under specific conditions only the revenue is recognized and accounted for.

(a)

To determine the transaction price.

Given information: All the related information is provided in the question document.

To determine

(b)

To prepare: To prepare the journal entries to record the sale.

Given information: All the related information is provided in the question document.

To determine

(c)

To determine the amount of loyalty point revenue to be recognized.

Given information: All the related information is provided in the question document.