Ashish
To increase sales, Ashish Inc., a public company following IFRS, implemented a customer loyalty program that rewards a customer with one loyalty
point for every $50 of purchases on a select group of products. Each point is redeemable for a $2 discount on any purchases of Ashish merchandise
in the next three years. Following the implementation of the program, during 2021, customers purchased select group products for $200,000.
All products are sold to provide a 45% gross profit. The stand-alone selling price of the purchased products is $200,000.
Based on prior experience with incentive programs like this, Ashish expects 19,000 points to be redeemed related to these sales.
Ashish appropriately uses this experience to estimate the value of future consideration related to bonus points.
Instructions:
a. Identify the separate performance obligation in the Ashish bonus point programs, and briefly explain when the performance obligations are
satisfied.
b Prepare the journal entries for cash sales including the issuance of bonus points for Ashish in 2021.
c Would the accounting of the customer loyalty program be different if Ashish had been following ASPE?
Remember to show your work and name your file something unique
Responses that do not show work and generic file names will receive a score of zero
