Reference no: EM132905958

Question - XYZ Inc offers a gift set to customers who send in $1.17 plus three coupon codes obtained from the purchase of the company's standard products. That is, a customer purchases three standard products which come with a coupon each, sends everything in along with the cheque for the amount above, and receives the gift set in the mail a few weeks later. During the year, the company acquired an adequate number of gift sets for $2.75 each using cash to meet the promotion's demand. During the year, the company sold 1,110,210 of its standard products for $4.33 each. The company estimated that 10% of the sales amount received from customers would relate to the gift set to be awarded. The company would expect 35.75% of the coupons to be sent in eventually, and, during the year, 266,450 coupons were redeemed. If the company followed IFRS using the revenue approach, how much promotion expense would be recorded for the year for the redeemed coupons?