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What amount of revenue from loyalty program should peanuts

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Problem 1: PEANUTS Company, a grocery retailer operates a customer loyalty program. It grants program members loyalty points when they spend a specified amount of groceries. Program members can redeem the points for further groceries. The points have no expiry date. During the year 2020, the entity grants 100,000 points, but management expects that only 80,000 points will be redeemed. The management of PEANUTS estimates the fair value of each loyalty point to be ?1, and defers revenue in the amount of ?100,000. During the year 2020, the company had redeemed 40,000 points. But during the year 2021, the management revises their expectation, it now expects to redeem 90,000 points. In 2021, the company redeemed 45,000 points. What amount of revenue from loyalty program should PEANUTS recognize for the year ended December 31, 2021?

Option 1: ? 45,000

Option 2: ? 50,000

Option 3: ? 25,000

Option 4: ? 20,000

Reference no: EM132998732

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