y they are more likely to stick with a brand that offers a lovalty program. Another...

 

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y they are more likely to stick with a brand that offers a lovalty program. Another 6670 uf thon advertising and sales for a company. Companies know it is easier to keep an existing customer rae than attract a new one." This article peeks Candy's interest because she is evaluating alternative marketing approaches to Increase sales and customer retention, One marketing plan under evaluation is to offer customers a Tree candy bar after 10 purchases of candy. Customers will be issued a punch card to track purchases and eligibility for a free candy bar. After, 10 punches the card is turned in for a free candy bar. Sally Sugarfoot, the company's owner, is not sure how the new plan will affect accounting procedures. She realizes that the company will be incurring costs each time a free candy bar is redeemed, but there will be no corresponding revenue or cash inflow. Candy Two-Tooth has enlisted your help as the resident expert on revenue recognition to help determine the appropriate accounting treatment if the market strategy is deployed. That treatment should describe when revenue is recognized and how it will be calculated. Required: Draft a memo response to Sally Sugarfoot explaining how to account for the punch card and the optional free candy bar. Hint: consider the performance obligations criteria of revenue recognition standards. If a performance obligation exists (and explain your conclusion based on criteria of performance obligation), determine how to allocate to the transaction price. It might be helpful to "create" a selling price of a candy bar and to determine any estimated redemption of punch cards by customer to explain your analysis. y they are more likely to stick with a brand that offers a lovalty program. Another 6670 uf thon advertising and sales for a company. Companies know it is easier to keep an existing customer rae than attract a new one." This article peeks Candy's interest because she is evaluating alternative marketing approaches to Increase sales and customer retention, One marketing plan under evaluation is to offer customers a Tree candy bar after 10 purchases of candy. Customers will be issued a punch card to track purchases and eligibility for a free candy bar. After, 10 punches the card is turned in for a free candy bar. Sally Sugarfoot, the company's owner, is not sure how the new plan will affect accounting procedures. She realizes that the company will be incurring costs each time a free candy bar is redeemed, but there will be no corresponding revenue or cash inflow. Candy Two-Tooth has enlisted your help as the resident expert on revenue recognition to help determine the appropriate accounting treatment if the market strategy is deployed. That treatment should describe when revenue is recognized and how it will be calculated. Required: Draft a memo response to Sally Sugarfoot explaining how to account for the punch card and the optional free candy bar. Hint: consider the performance obligations criteria of revenue recognition standards. If a performance obligation exists (and explain your conclusion based on criteria of performance obligation), determine how to allocate to the transaction price. It might be helpful to "create" a selling price of a candy bar and to determine any estimated redemption of punch cards by customer to explain your analysis.

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To Sally Sugarfoot From Your name Subject Revenue recognition for loyalty program Date Date Dear Sal... View the full answer