Problem 6-06 Kingbird Inc. has a customer loyalty program that rewards a customer with one customer loyalty point for every $100 of purchases. Each point is redeemable for a $3 discount on any future purchases. On July 2, 2020, customers purchase products for $360,000 (with a cost of $205,200) and earn 3,600 points redeemable for future purchases. Kingbird expects 3,000 points to be redeemed (based on its past experience, which is predictive of the amount of consideration to which it will be entitled). Kingbird estimates a stand-alone selling price of $2.50 per point (or $9,000 total) on the basis of the likelihood of redemption. The points provide a material right to customers that they would not receive without entering into a contract. As a result, Kingbird concludes that the points are a separate performance obligation. Determine the transaction price for the product and the customer loyalty points. (Round percentage allocations to 2 decimal places, e.g. 52.75 and final answers to 0 decimal places, e.g. 5,275.) Product Loyalty Points Transaction price SHOW LIST OF ACCOUNTS LINK TO TEXT Prepare the journal entries to record the sale of the product and related points on July 2, 2020. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Date Account Titles and Explanation Debit Credit July 2, 2020 (To record sales) July 2, 2020 (To record cost of goods sold) At the end of the first reporting period (July 31, 2020), 1,000 loyalty points are redeemed. Kingbird continues to expect 3,000 loyalty points to be redeemed in total. Determine the amount of loyalty point revenue to be recognized at July 31, 2020. Loyalty point revenue recognized Prepare the journal entries for cash sales on July 31, 2020, assuming the points were applied to cash sales of $90,000 with a cost of $46,800. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter o for the amounts. Round the calculation of revenue per point to three decimal places, e.g. 52.750 and final answers to 0 decimal places, e.g. 5,275.) Date Account Titles and Explanation Debit Credit July 31, 2020 (To record sales.) July 31, 2020 (To record cost of goods sold.) Problem 6-06 Kingbird Inc. has a customer loyalty program that rewards a customer with one customer loyalty point for every $100 of purchases. Each point is redeemable for a $3 discount on any future purchases. On July 2, 2020, customers purchase products for $360,000 (with a cost of $205,200) and earn 3,600 points redeemable for future purchases. Kingbird expects 3,000 points to be redeemed (based on its past experience, which is predictive of the amount of consideration to which it will be entitled). Kingbird estimates a stand-alone selling price of $2.50 per point (or $9,000 total) on the basis of the likelihood of redemption. The points provide a material right to customers that they would not receive without entering into a contract. As a result, Kingbird concludes that the points are a separate performance obligation. Determine the transaction price for the product and the customer loyalty points. (Round percentage allocations to 2 decimal places, e.g. 52.75 and final answers to 0 decimal places, e.g. 5,275.) Product Loyalty Points Transaction price SHOW LIST OF ACCOUNTS LINK TO TEXT Prepare the journal entries to record the sale of the product and related points on July 2, 2020. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Date Account Titles and Explanation Debit Credit July 2, 2020 (To record sales) July 2, 2020 (To record cost of goods sold) At the end of the first reporting period (July 31, 2020), 1,000 loyalty points are redeemed. Kingbird continues to expect 3,000 loyalty points to be redeemed in total. Determine the amount of loyalty point revenue to be recognized at July 31, 2020. Loyalty point revenue recognized Prepare the journal entries for cash sales on July 31, 2020, assuming the points were applied to cash sales of $90,000 with a cost of $46,800. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter o for the amounts. Round the calculation of revenue per point to three decimal places, e.g. 52.750 and final answers to 0 decimal places, e.g. 5,275.) Date Account Titles and Explanation Debit Credit July 31, 2020 (To record sales.) July 31, 2020 (To record cost of goods sold.)