PART A (10 Marks)

An entity sells 100 products for $100 each. Sales are made for cash, rather than on credit terms. The entity's customary business practice is to allow a customer to return any unused product within 30 days and receive a full refund. The cost of each product is $60. To determine the transaction price, the entity decides that the approach that is most predictive of the amount of consideration to which the entity will be entitled is the most likely amount. Using the most likely amount, the entity estimates that three products will be returned. The entity estimates that the costs of recovering the products will be immaterial and expects that the returned products can be resold at a profit.

REQUIRED:

Prepare the journal entries to record the sale, and the subsequent return of the assets. Assume the goods are transferred to the customer on 1 June 2022. Narrations are NOT required.

DETAILS	DEBIT	CREDIT

PART B (5 Marks)

Woodwoods LTd, a retailer, operates a customer loyalty program. Program members are granted loyalty points when they spend a specified amount on groceries. These points can then be redeemed to purchase further goods from the retailer. The points have no expiry date. During the reporting period to 31 March 2012 the retailer grants 100 000 points. The fair value of each loyalty point is estimated to be $1. When the awards scheme was set up, management expected 80% of these points to be redeemed. By 31 March 2012, customers have redeemed 40 000 points in exchange for goods.

During the reporting period ending 31 March 2013, Woodwoods Ltd revises its expectations and expects 90% of the points to be redeemed. By the end of the reporting period ending 31 March 2013, 41% of the points are redeemed.

During the reporting period ending 31 March 2014, a further 9 000 points are redeemed, taking the total points redeemed to 90 000. Woodwoods Ltd continues to expect that only 90 000 points will be redeemed. No further points will be redeemed after the reporting period ending 31 March 2014.

REQUIRED:

Prepare the journal entries to account for the awards program from 31 March 2012 to 31 March 2014.

DETAILS	DEBIT	CREDIT

If you could show me the working that would be wonderfull..