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How much are the unearned revenue points

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Reference no: EM133057721

Problem - Jao Company operates a customer loyalty program. The entity grants loyalty points for goods purchased. The loyalty points can be used by the customers in exchange for the goods of the entity. The points have no expiry date.

In 2020, the entity used 100,000 award credits and expects that 93.75% of these award credits shall be redeemed. The total stand-alone selling price of the award credits granted is reliably measured at 1,800,000. In 2020, the entity sold goods to customers for a total consideration of 13,200,000 based on stand-alone selling price. The awards credits redeemed and total award credits expected to be redeemed each year are as follows:

Redeemed Expected to be redeemed 2020 45,000 93.75%

How much are the unearned revenue points for 2020? Show computations and explain.

Reference no: EM133057721

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