Supply Club, Incorporated, sells a variety of paper products, office supplies, and other products used by businesses and individualconsumers. During July 2024, it started a loyalty program through which qualifying customers can accumulate points and redeemthose points for discounts on future purchases. Redemption of a loyalty point reduces the price of one dollar of future purchases by20% (equal to 20 cents). Customers earn one loyalty point for each dollar of goods purchased, but do not earn additional loyalty pointsfor purchases that are made by redeeming loyalty points. Based on past experience, Supply Club estimates a 60% probability that anypoint 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.Required:1. & 2. Prepare Supply Club's journal entry to record July and August sales. During August, customers redeem loyalty points on$68,400 of merchandise. Sixty-five percent of those sales were for cash, and the remainder were credit sales.Note: Do not round intermediate calculations. If no entry is required for a transaction/event, select "No journal entry required" inthe first account field.

The record of day-to-day transactions in the books of accounts is called journal entries. In a…

Required: 1. & 2. Prepare Supply Club's journal entry to record July and August sales. During August, customers redeem loyalty points on $68,400 of merchandise. Sixty-five percent of those sales were for cash, and the remainder were credit sales. Note: Do not round intermediate calculations. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.

Required: 1. & 2. Prepare Supply Club's journal entry to record July and August sales. During August, customers redeem loyalty points on $68,400 of merchandise. Sixty-five percent of those sales were for cash, and the remainder were credit sales. Note: Do not round intermediate calculations. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter17: Advanced Issues In Revenue Recognition

Section: Chapter Questions

Problem 13RE: CoolShoes sells its elite tennis shoes to sports retailers throughout the country. When introducing...

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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 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 10,200 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.…
Supply Club, Inc., sells a variety of paper products, office supplies, and other products used by businesses and individual consumers. During July 2021 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 do not earn additional loyalty points for purchases on which loyalty points are redeemed. Based on past experience, Supply Club estimates a 80% probability that any point issued will be redeemed for the discount. During July 2021, the company records $136,000 of revenue and awards 150,000 loyalty points. The aggregate stand-alone selling price of the purchased products is $136,000. Seventy-five percent of sales were cash sales, and the remainder were credit sales. Required: 1. & 2. Prepare Supply Club's journal entry to record July and August sales. During August, customers…
Supply Club, Inc., sells a variety of paper products, office supplies, and other products used by businesses andindividual consumers. During July 2018 it started a loyalty program through which qualifying customers canaccumulate points and redeem those points for discounts on future purchases. Redemption of a loyalty pointreduces the price of one dollar of future purchases by 20% (equal to 20 cents). Customers do not earn additionalloyalty points for purchases on which loyalty points are redeemed. Based on past experience, Supply Club estimates a 60% probability that any point issued will be redeemed for the discount. During July 2018, the companyrecords $135,000 of revenue and awards 125,000 loyalty points. The aggregate stand-alone selling price of thepurchased products is $135,000. Eighty percent of sales were cash sales, and the remainder were credit sales.Required:1. Prepare Supply Club’s journal entry to record July sales.2. During August, customers redeem loyalty points on…
MARYJANE, IN., a grocery business, operates a customer loyalty program. MARYJANE grants its program members points when they spend a specified amount of purchases. The points have no expiry date, and they can use the points for further purchases. During 2021, the customers earned 80,000 points, but management expects that 75% of these points will be redeemed. The stand-alone selling price of each loyalty point is estimated at Php 20. The sales during 2021 amounted to Php 6,800,000 on stand-alone selling price. On December 31, 2021, 28,800 points have been redeemed. In 2022, the management revised its expectations and now expects 85% of the points to be redeemed. In 2022, the 12,000 points were redeemed. a. 1,367,481 b. 1,200,000 c. 1,020,000 d. 1,295,238 What amount of the transaction price should be allocated to the groceries?
GoodBuy sells gift cards redeemable for GoodBuy products either in store or online. During 2018, GoodBuysold $1,000,000 of gift cards, and $840,000 of the gift cards were redeemed for products. As of December 31,2018, $30,000 of the remaining gift cards had passed the date at which GoodBuy concludes that the cards willnever be redeemed. How much gift card revenue should GoodBuy recognize in 2018?
EM Company, a grocery retailer, operates a customer loyalty program. The entity grants program members loyalty points when they spend a specified amount on groceries. Program members can redeem the points for further groceries. The points have no expiry date. During2019, the sales amounted to P7,000,000 and the entity have granted 10,000points. Management expects that only 80% of the points will be redeemed. The cost of each loyalty point is P100. As of December 31, 2019, 4,800 points have already been redeemed. In2020, the management revised its expectations to 90% of the points will be redeemed. As of December 31, 2020, the entity redeemed 2,400 points. What amount should be reported as revenue earned from loyalty points in 2020? A.P700,000B.P210,000C.P175,000D.P200,000
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?
Maximum Inc. (retailer) has a loyalty program that rewards its customers one point per $1 spent. Points are redeemable for $0.20 off future purchases. A customer purchases products (cost of $280) for cash at the usual selling price of $400 and earns 400 points redeemable for $80 off future purchases of goods or services. The retailer expects redemption of 360 points or 90% of points earned. a.) How should the transaction price be allocated among the performance obligation(s)?Note: Round each allocated transaction price in the table below to the nearest dollar. b. Prepare Maximum’s journal entry to record the $400 sale to the customer where the customer earned 400 loyalty points.