Cuppa Brew Limited (“Cuppa Brew”) specialises in coffee and owns coffee shops that sell various coffee-based beverages, amongst other things.
They run a reward programme for all their loyal customers. For every eight coffee-based beverages that a customer buys, they will be awarded one complimentary coffee-based drink of their choice.
Customers are provided with a card that the coffee shop stamps every time the customer buys a coffee-based beverage from a Cuppa Brew coffee shop.

Cuppa Brew sells all their coffee-based beverages for R28 per beverage. They estimated that the stand-alone selling price of the complimentary beverage portion included in each sale to be R5. This estimation also considers the expectation of whether or not the customer will take up the complimentary beverage on offer.

REQUIRED:
Discuss the treatment of the coffee sales, including the complimentary coffee, in the records of Cuppa Brew Limited, in accordance with the requirements of IFRS 15. Include calculations to support your answer where necessary.

Round all answers to two decimals.

Answer rating: 100% (QA)

I Cuppa Brew Limited Background Cuppa Brew Limited offers 1 complimentary coffee based on the custom... View the full answer