Question

Ayayai inc. Has a customer loyalty program that rewards a customer with 1 customer loyalty point for every $10 of purchase. Each point is redeemable for $3 discount on any future purchases . On july 2, 2020 customers purchase pro for $370000 (with a cost of $210900 )and earn 37000 points redeemable for future purchases. Ayayai is expected 31500 points to be redeemed. Ayayai estimates a standalone selling price for $2.50 per point (or $92500 total ) on the basis of the likelihood of redemption . The points provide a material right to customers that they would not receive without entering into a contract. As a result. Ayayai concludes that the points are separate performance obligation. Determine the transaction price for the product and the customer loyalty points. Product purchases, loyalty points, total transaction price

Answer 1

The transaction price for Ayayai's product and the customer loyalty points are $92500 and 37000 points respectively.

How to determine the transaction price?

Based on the information provided about Ayayai inc., the transaction price for their product and the customer loyalty points would be allocated as follows:

                                            SSP            PA              TTP                    AA____

Product purchases       $370,000       80%         $370,000         $296,000

Loyalty points               $92,500*       20%         $370,000         $74,000__

                                      $462,500                                                 $370,000

*37,000 × 2.50 = $92,500

Note:

• SSP means Standalone selling prices.

• PA means Percent allocated.

• TTP means Total transaction price.

• AA means Allocated amounts.

Read more on transaction price here: brainly.com/question/15874481

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