According to Jorge Company: On December 31, 2020, 28,800 points have been redeemed in exchange for purchases. In 2021, customers have redeemed 9,000 points. How much is the revenue to be recognized by James in 2020?
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James Company has an arrangement with with Jorge Company that operates a customer loyalty program. The entity grants loyalty points of Jorge Company when they spend a specified amount on purchases. | ||||||
Program members can redeem their points with Jorge Company. The points have no expiry date. | ||||||
During 2020, the customers earned 60,000 points. The stand-alone selling price of each loyalty point is estimated at P20. | ||||||
The sales during 2020 amounted to P6,800,000 based on stand-alone selling price. | ||||||
According to Jorge Company: | ||||||
On December 31, 2020, 28,800 points have been redeemed in exchange for purchases. | ||||||
In 2021, customers have redeemed 9,000 points. |
How much is the revenue to be recognized by James in 2020?
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- James Company has an arrangement with with Jorge Company that operates a customer loyalty program. The entity grants loyalty points of Jorge Company when they spend a specified amount on purchases. Program members can redeem their points with Jorge Company. The points have no expiry date. During 2020, the customers earned 60,000 points. The stand-alone selling price of each loyalty point is estimated at P20. The sales during 2020 amounted to P6,800,000 based on stand-alone selling price. According to Jorge Company: On December 31, 2020, 28,800 points have been redeemed in exchange for purchases. In 2021, customers have redeemed 9,000 points. How much is the initial unearned customer loyalty points to be recognized by James?Zilong 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 2021 the entity granted 80,000 points. Management expects that 90% of these points will be redeemed. The fair value of each loyalty point is estimated at P20. The sales during 2021 amounted to P9,000,000 including loyalty points. On December 31, 2021, 28,800 points have been redeemed in exchange for purchases. In 2022 the management revised its expectations and expects 85% of the points to be redeemed altogether. During 2022, the entity redeemed 12,000 points. What is the revenue earned from loyalty points for the year ended December 31, 2021?Erika 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 50,000 award credits and expects that 80% of these award credits shall be redeemed. The stand-alone selling price of the award credits granted is reliably measured at P1,000,000. In 2020, the entity sold goods to customers for a total consideration of P7,000,000 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 15,000 80% 2021 7,950 85% 2022 2,550 85%…
- Familiar 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 2019, the entity issued 450,000 award credits and expects that 40% of these award credits shall be redeemed. The total stand-alone selling price of the award credits granted is measured reliably at P9,000,000. In 2019, the entity sold goods to customers for a total consideration of P36,000,0000 based on a 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 2019 135,000 40% 2020 67,500 45% What is the revenue from points for 2019? P1,350,000 P3,600,000 P1,080,000 P3,375,000 What is the revenue from points for 2020?…Cinnamon 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 2019, the entity issued 150,000 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 measured reliably at P3,000,000. In 2019, the entity sold goods to customers for a total consideration of P12,000,0000 based on a standalone 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 2019 45,000 80% 2020 22,500 90% What is the revenue from points for 2019? What is the revenue from points for 2020?Besik Inc. 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. During 2020, the entity issued 25,000 award credits and expects that 85% of these shall be redeemed. The stand-alone selling price of the award credits granted is reliably measured at P1,500,000. In 2020, the entity sold goods to customers for a total consideration of P 8,500,000 based on stand-alone selling price. On Dec. 31, 2020, 10,000 award credits have been redeemed. In 2021, the management revised expectations and expects 80% of the award credits to be redeemed. In 2021, 5,000 award credits redeemed. What is the revenue earned from award credits for 2021? *a. P 956,250b. P 600,000c. P 356,250d. P 318,750
- 3. Erika 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 50,000 award credits and expects that 80% of these award credits shall be redeemed. The stand-alone selling price of the award credits granted is reliably measured at P1,000,000. In 2020, the entity sold goods to customers for a total consideration of P7,000,000 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 15,000 80% 2021 7,950 85% 2022 2,550 85% 2023 15,000 90% Required: Prepare journal entries from 2020 to 2023.An entity, a grocery retailer, operates a customer loyalty program. The entity grants program members loyalty points when they spend s specified amount on groceries. The points have no expiry date. During 2022, the sales amounted to 7,000,000.00 based on stand -alone selling price. During the year, the entity granted 10,000 points. But management expected that only 80% or 8,000 points will be redeemed. The stand alone selling price of each loyalty points is estimated at P100.On December 31, 2022, 4,800 points have been redeemed. In 2023, management revised its expectations and now expected that 90% or 9,000.00 will be redeemed altogether. During 2021, the entity redeemed 2,400 points.What amount should be reported as sales revenue including the revenue earned from points for 2022? What is the revenue earned from loyalty points for 2023?ABC Company, a department store operates a customer loyalty program.The entity grants program members loyalty points when they spend a specified amount on their products. Program members can redeem the points for future purchases.The points have no expiry date. During 2020, the sales amounted to P 10,000,000 and the entity grants 5 points for every P 100 purchase. Management expects that only 70% of the points will be redeemed. Fair values of products sold and the reward points for the year were P 9,000,000 and P 1,000,000, respectively.As of December 31, 2020, half of the total points granted have already been redeemed. In 2021, the management revised its expectations to 90% of the points will be redeemed. As of December 31, 2021, there is a redemption of 25% of the remaining points.What amount should be reported as revenue earned from loyalty points in 2020?To input answers, kindly follow the sample format below(no peso sign, with comma, no space):ex. 100,000Failure to follow the…
- ABC Company, a department store operates a customer loyalty program.The entity grants program members loyalty points when they spend a specified amount on their products. Program members can redeem the points for future purchases.The points have no expiry date. During 2020, the sales amounted to P 10,000,000 and the entity grants 5 points for every P 100 purchase. Management expects that only 70% of the points will be redeemed. Fair values of products sold and the reward points for the year were P 9,000,000 and P 1,000,000, respectively.As of December 31, 2020, half of the total points granted have already been redeemed. In 2021, the management revised its expectations to 90% of the points will be redeemed. As of December 31, 2021, there is a redemption of 25% of the remaining points.What amount should be reported as revenue earned from loyalty points in 2020?MOA sells gift cards that are redeemable only at its stores. The company's policy is to record the redemption amount as realized. MOA sold P1,800,000 worth of gift certificates in 2019 and redeemed P1,560,000 worth of gift certificates. The value of outstanding gift certificates as of January 1, 2019 is P520,000. The company's gross profit margin is 40%. What is the obligation for outstanding gift cards at the end of the fiscal year on December 31, 2019?Erika 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 50,000 award credits and expects that 80% of these award credits shall be redeemed. The fair value 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 P9,000,000 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 15,000 80% 2021 7,950 85% 2022 2,550 85% 2023 15,000 90% Required: Prepare journal entries from 2020 to 2023.