E$10\mathrm{.}13($LO $2)$ AP Video Steig's Sports Store has a customer loyalty program in which it issues points to customers for

every cash purchase that can be applied to future purchases. For every dollar spent, a customer receives three points. Each

point is worth one cent. There is no expiry date on the points. Steig's estimates that $35\%$ of the points issued will eventually

be redeemed. Steig's has a December $31$ year end.

The program was started in $2023.$ During $2023,900,000$ points were issued. Sales for $2023$ were $$300,000.$ In $2024,1\mathrm{.}2$

million points were issued. Total sales for $2024$ were $$400,000.$

Instructions

a$.$ What is the stand$-$alone value of the points issued in $2023?$ In $2024?$

b$.$ Prepare the journal entries to record the sales for $2023$ and $2024.$

c$.$ When the points are redeemed, how is this accounted for? What is the impact of the point redemptions on profit and

cash flow?