FB Seller is a high street retailer and has launched a promotional campaign with the following elements:discount coupons are provided to any customers that purchase goods with a total value of over P6,000. The discount coupons entitle the customer to an additional 50% till discount on selected items during the 90 days immediately following the campaign;FB Seller has issued 80 of the 50% coupons to high-spending consumers and took from them P100,000 at the till during the campaign; andbased on historical trends, management expects that:75% of the end-consumers receiving 50% discount coupons will use the coupon;customers using the coupons will spend on average P1,000 at the till; andIt will still make a positive margin on the transactions when the coupons are use Assuming FB Seller has decided to use the portfolio approach, on the basis that it reasonably expects that the effects on the financial statements would not differ materially from applying IFRS 15 to the individual contracts, the amount of "Contract liability – discount coupons" before redemption is _____________________.Assuming FB Seller has decided to use the portfolio approach, on the basis that it reasonably expects that the effects on the financial statements would not differ materially from applying IFRS 15 to the individual contracts, the amount of "Product Sales" initially recorded is _____________________.

Revenue recognition is a basic accounting principle that specifies when and how revenue should be…

Answered: Assuming FB Seller has decided to use…

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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FB Seller is a high street retailer and has launched a promotional campaign with the following elements:

discount coupons are provided to any customers that purchase goods with a total value of over P6,000. The discount coupons entitle the customer to an additional 50% till discount on selected items during the 90 days immediately following the campaign;

FB Seller has issued 80 of the 50% coupons to high-spending consumers and took from them P100,000 at the till during the campaign; and

based on historical trends, management expects that:

75% of the end-consumers receiving 50% discount coupons will use the coupon;
customers using the coupons will spend on average P1,000 at the till; and
It will still make a positive margin on the transactions when the coupons are use

Assuming FB Seller has decided to use the portfolio approach, on the basis that it reasonably expects that the effects on the financial statements would not differ materially from applying IFRS 15 to the individual contracts, the amount of "Contract liability – discount coupons" before redemption is _____________________.

Assuming FB Seller has decided to use the portfolio approach, on the basis that it reasonably expects that the effects on the financial statements would not differ materially from applying IFRS 15 to the individual contracts, the amount of "Product Sales" initially recorded is _____________________.

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