26 of 28 2:53:50 Us REVENUE RECOGNITION PROBLEM (14 MARKS) Part A (4 marks) During 2016, Air Amenadiel began operations as an airline. Alt Amenadiol offers a customer loyalty program. For each aeronautical mile that a passenger travels on a paid fight, the passenger accrues one flight mile. Passengers can redeem accrued night mor free air travel. Earned miles do not expire. Air Ameradiel's analysis of its competitors programs suggests an average redemption rate of 55% In 2016, Air Amenadiel sold $5,000,000 in plane tickets which included $1,000,000 for travel in 2017. It awarded 50,000,000 flight miles with an estimated fair value of $540,000. 1,375,000 flight miles were redeemed in 2016. Instructions: a. What is the amount of revenue from flights to be recognized in 2016? b. What is the amount of revenue from the miles award program to be recognized in 20167 Based on the information above what would be reported on the Statement of Financial Position at December 31, 2016 1 A RI MacBook Air 288 ll FB VO % 5 & 7 * O 6 8 9 0 Z r Y U 0 P