In 2021, Holyoak Inc. offers a coupon for $20 off qualifying purchases of its new line of products. Holyoak sold 10,200 of these products during the year. By year-end of 2021, 7,300 coupons had been redeemed and the $20 reduction of purchase price provided to customers. Holyoak's historical experience with such coupons indicates that 85% of customers use the coupon. Holyoak recognizes coupon expense in the period coupons are issued. What is the coupon promotion liability that Holyoak should report in its December 31, 2021, balance sheet? Multiple Choice O O O $20,400. $27,400. $17,200. $19,340.

In 2021, Holyoak Inc. offers a coupon for $20 off qualifying purchases of its new line of products. Holyoak sold 10,200 of these products during the year. By year-end of 2021, 7,300 coupons had been redeemed and the $20 reduction of purchase price provided to customers. Holyoak's historical experience with such coupons indicates that 85% of customers use the coupon. Holyoak recognizes coupon expense in the period coupons are issued. What is the coupon promotion liability that Holyoak should report in its December 31, 2021, balance sheet? Multiple Choice O O O $20,400. $27,400. $17,200. $19,340.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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James Company has an arrangement with with Jorge Company that operates a customer loyalty program. The entity grants loyalty points of Jorge Company when they spend a specified amount on purchases. Program members can redeem their points with Jorge Company. The points have no expiry date. During 2020, the customers earned 60,000 points. The stand-alone selling price of each loyalty point is estimated at P20. The sales during 2020 amounted to P6,800,000 based on stand-alone selling price. According to Jorge Company: On December 31, 2020, 28,800 points have been redeemed in exchange for purchases. In 2021, customers have redeemed 9,000 points. How much is the initial unearned customer loyalty points to be recognized by James?
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