Part B. Beaver Limited is a retail company that sells sporting goods. The company has acustomer loyalty program that allows customers to earn points based on sales made. Thesepoints can be accumulated and used for future purchases. One customer loyalty point is awardedfor every $1 of purchases. During March 2023, the company recorded sales of $1,725,000 tocustomers who were accumulating points. The stand-alone value of these goods sold was$1,725,000. Beaver has also determined that each point has a fair value of $0.017.Required:a. What are the two performance obligations?b. Sale of Goodsc. Customer Loyalty Program1. Allocate the sales price of $1,725,000 to the two performance obligationsAllocation to Performance obligation 1: $Allocation to performance obligation 2: $2. Prepare the entry to record the sales (all cash) for the month of March 2023.CashRevenueLoyalty LiabilityDebit1,725,000Credit

1.Performance Obligation 1: 1$ Sale = 1 Customer Loyalty PointTotal March Sales = $1,725,000Total…

Answered: Part B. Beaver Limited is a retail…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Sammy John Ltd has a customer loyalty programme that rewards a customer with one customer loyalty point for every $10 of purchases. Each point is redeemable for a $1 discount on any future purchases Customers purchase products for $100,000 and earn 10,000 points The entity expects 9,500 points to be redeemed, so they have a stand-alone selling price $9,500 Identify the steps in the revenue recognition process match the steps to the relevant process in the case above to describe how it will be dealt with under IFRS 15?
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?
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 the total number of points that will be redeemed is 90,000 points.What amount of liability must be presented in the statement of financial position relating to customer loyalty awards at December 31,2020? How much revenue is recognized as a result of the redemption of points for the year 2019? and What…
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 the total number of points that will be redeemed is 90,000 points.How much revenue is recognized as a result of the redemption of points for the year 2020?
Supply Club, Incorporated, sells a variety of paper products, office supplies, and other products used by businesses and individual consumers. During July 2024, it started a loyalty program through which qualifying customers can accumulate points and redeem those points for discounts on future purchases. Redemption of a loyalty point reduces the price of one dollar of future purchases by 20% (equal to 20 cents). Customers earn one loyalty point for each dollar of goods purchased, but do not earn additional loyalty points for purchases that are made by redeeming loyalty points. Based on past experience, Supply Club estimates a 60% probability that any point issued will be redeemed for the discount. During July 2024, the company redeemed 11,400 points and sold additional product of $142,500, so it recorded of revenue of $153,900. The aggregate stand-alone selling price of the purchased products is $153,900. Seventy percent of sales were cash sales, and the remainder were credit sales.…
Pagan Restaurants accepts credit and debit cards as forms of payment. Assume Pagan had $10,000 of credit and debit card sales on April 30, 2023. 9. 10. Suppose Pagan's processor charges a 1% fee and deposits sales net of the fee. Joumalize the sales transaction for the restaurant. Suppose Pagan's processor charges a 1% fee and deposits sales using the gross method. Journalize the sales transaction for the restaurant. 9. Suppose Pagan's processor charges a 1% fee and deposits sales net of the fee. Journalize the sales transaction for the restaurant. (Record debits first, then, credits. Select the explanation on the last line of the journal entry table.) Date Accounts and Explanation Debit Credit Apr. 30 10. Suppose Pagan's processor charges a 1% fee and deposits sales using the gross method. Joumalize the sales transaction for the restaurant. Date Apr. 30 Accounts and Explanation Debit Credit
Supply Club, Incorporated, sells a variety of paper products, office supplies, and other products used by businesses and individual consumers. During July 2024, it started a loyalty program through which qualifying customers can accumulate points and redeem those points for discounts on future purchases. Redemption of a loyalty point reduces the price of one dollar of future purchases by 20% (equal to 20 cents). Customers earn one loyalty point for each dollar of goods purchased, but do not earn additional loyalty points for purchases that are made by redeeming loyalty points. Based on past experience, Supply Club estimates a 60% probability that any point issued will be redeemed for the discount. During July 2024, the company redeemed 11,200 points and sold additional product of $140,000, so it recorded of revenue of $151,200. The aggregate stand-alone selling price of the purchased products is $151,200. Eighty percent of sales were cash sales, and the remainder were credit sales.…
Supply Club, Incorporated, sells a variety of paper products, office supplies, and other products used by businesses and individual consumers. During July 2024, it started a loyalty program through which qualifying customers can accumulate points and redeem those points for discounts on future purchases. Redemption of a loyalty point reduces the price of one dollar of future purchases by 20% (equal to 20 cents). Customers earn one loyalty point for each dollar of goods purchased, but do not earn additional loyalty points for purchases that are made by redeeming loyalty points. Based on past experience, Supply Club estimates a 60% probability that any point issued will be redeemed for the discount. During July 2024, the company redeemed 10,600 points and sold additional product of $132,500, so it recorded of revenue of $143,100. The aggregate stand-alone selling price of the purchased products is $143,100. Eighty percent of sales were cash sales, and the remainder were credit sales.…
Supply Club, Incorporated, sells a variety of paper products, office supplies, and other products used by businesses and individual consumers. During July 2024, it started a loyalty program through which qualifying customers can accumulate points and redeem those points for discounts on future purchases. Redemption of a loyalty point reduces the price of one dollar of future purchases by 20% (equal to 20 cents). Customers earn one loyalty point for each dollar of goods purchased, but do not earn additional loyalty points for purchases that are made by redeeming loyalty points. Based on past experience, Supply Club estimates a 60% probability that any point issued will be redeemed for the discount. During July 2024, the company redeemed 10,200 points and sold additional product of $127,500, so it recorded of revenue of $137,700. The aggregate stand-alone selling price of the purchased products is $137,700. Seventy percent of sales were cash sales, and the remainder were credit sales.…
1. LALA Department store grants loyalty awards to its customers wherein for every P 100 purchase made, the customer receives 5 points equivalent to P 5. The points accumulated by the customer may be used as part or full payment for merchandise purchases in the future. During 2018, total sales amounted to P 10,000,000. Fair values of the merchandise sold and reward points are P 9,500,000 and P 500,000, respectively. At the end 2018, 60% out of 90% have been redeemed by the customers. At the end 2019, an additional 20% have been redeemed and the revised estimate of total points expected to be redeemed was now at 95%. In accordance with IFRS 15, how much is the balance of the liability for customer loyalty awards as of December 31,2018? 2. On January 1,2019, EROS Company introduced a new line of product that carries a 3 year warranty against factory defects. The product warranties provide assurance that the new line of product will function as intended based on agreed-upon…
Malachi Department Store starts its business on May 1, 2022 and completes the following transactions relating to its credit card sales during May: Total sales charged by customers are as follows: BPI P 600,000 RCBC 1,200,000 Eastwest 1,500,000 Deposits made by banks to charge the account of Malachi for credit card sales, net of 3% service charge. BPI P 407,400 RCBC 814,800 Eastwest 1,018,500. How much is the accounts receivable as of May 31, 2022?
Beta Corp. has a branch in Davao City established on May 31, 2022. During 2022, the home office shipped merchandise costing P110,000 to the branch, billed at 110% of cost. At the end of the year, the branch reported sales of P200,000, operating expenses of P80,000, and a net income from its operation of P10,000. Determine the true net income of the branch.

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