Question
In 2020, Bay Village Coffee offered a Loyalty program for frequent buyers of their drinks. Any customer who uses their loyalty card will get a
In 2020, Bay Village Coffee offered a Loyalty program for frequent buyers of their drinks. Any customer who uses their loyalty card will get a credit of $0.06 for every $1.00 they spend and it can be cashed in any time in 2021. Bay Village Coffee also knows that 15% of all loyalty card users do not use their points. Customers with loyalty cards spent $50,000 in 2020.
Based on the above information, what is the full value of all loyalty cards issued as of December 31, 2020? Show your calculations.
How much should Bay Village Coffee show as a liability?
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