ABC Company runs a department store and grants loyalty awards to its customers. For every P 100
Question:
ABC Company runs a department store and grants loyalty awards to its customers. For every P 100 purchase made by the customer, the customer receives a credit of 5 points equivalent to P 5. The accumulated points can be used by the customer to as part or full payment of for merchandise purchased in the future. During the year 2019, the company made sales of P 10,000,000. The fair value of the points is equivalent to the total number of points awarded during the year. For the year 2019, ABC expects that 70,000 points will be redeemed but only 65,000 points were redeemed relating to 2019 sales. For the year 2020, an additional 20,000 points were redeemed and ABC revised its estimate that only 10,000 points granted in 2019 will be redeemed as of December 31,2020. How much revenue is recognized as a result of the redemption of points for the year 2020?
Business Law Principles and Practices
ISBN: 978-1133586562
9th edition
Authors: Arnold J. Goldman, William D. Sigismond