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1. Metlock Rewards Inc. provides rewards services to licensees. Metlock records service revenue related to rewards (granted as reward vouchers, which can be redeemed
1. Metlock Rewards Inc. provides rewards services to licensees. Metlock records service revenue related to rewards (granted as reward vouchers, which can be redeemed at a variety of retailers) and recognizes the cost of redemptions in the year vouchers are sold to licensees. Metlock's past experience indicates that only 80% of the vouchers sold to licensees will be redeemed. Metlock's liability for stamp redemptions was $12,339,500 at December 31, 2024. Additional information for 2025 is as follows. Service revenue from vouchers sold to licensees $9,691,900 Cost of redemptions (vouchers sold prior to 1/1/25) 5,653,100 If all the vouchers sold in 2025 were presented for redemption in 2026, the redemption cost would be $5,417,300. What amount should Metlock report as a liability for voucher redemptions at December 31, 2025? Liability for stamp redemptions at December 31, 2025 $ 2. In packages of its products, Bonita Inc. includes coupons that may be presented at retail stores to obtain discounts on other Bonita products. Retailers are reimbursed for the face amount of coupons redeemed plus 10% of that amount for handling costs. Bonita honors requests for coupon redemption by retailers up to 3 months after the consumer expiration date. Bonita estimates that 60% of all coupons issued will ultimately be redeemed. Information relating to coupons issued by Bonita during 2025 is as follows. Consumer expiration date 12/31/25 Total face amount of coupons issued $754,400 Total payments to retailers as of 12/31/25 325,460
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