How much is the gross profit to be recognized

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For the year 2020, Zellie Company started a promotional program wherein for every P100 purchase made by a customer, one point will be awarded to that customer. For every 50 points earned by a customer and a pre-determined additional peso amount, a premium tumbler can be redeemed. Each tumbler usually sells at P100. Sales made during the year totaled P2,100,000. Out of the 300 tumblers purchased during the year, 148 tumblers remain unredeemed as of yearend resulting to the Premium Inventory having a carrying amount of P10,360. Since the accountant was not yet familiar with the revenue approach of accounting for premiums, he reported for the 2020 Premium Expense of P12,600 and Estimated Premium Liability of P5,000 as of yearend.

Problem 1: Using the revenue approach under PFRS 15, how much is the amount to be credited to sales of the main products?

Problem 2: Using the revenue approach under PFRS 15, how much is the gross profit to be recognized from the actual redemption of tumblers during the year?

Problem 3: Using the revenue approach under PFRS 15, how much is the amount to be reported as liability as of yearend?

Reference no: EM133000583

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