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What amount of the transaction price should be allocated

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Problem 1: Harden Company operates a customer loyalty program. The entity grants program members loyalty points when they spend a specified amount on purchases. Program members can redeem the points for further purchases. The points have no expiry date. During 2020, the customer earned 60,000 points. Management expects that 100% of these points will be redeemed. The stand-alone selling price of each loyalty point is estimated at $20. The sales during 2020 amounted to $6,800,000 based on stand-alone selling price. On December 31, 2020, 28,800 points have been redeemed in exchange for purchases. In 2021, the management revised expectations and now expects 90% of the points to be redeemed. In 2021, the entity redeemed 9,000 points. What amount of the transaction price should be allocated to the points?

Reference no: EM132650650

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