Question
Save-Always Stores started a customer loyalty program at the beginning of 2020 in which customers making cash purchases of gasoline at Save-Always Gas Bars
Save-Always Stores started a customer loyalty program at the beginning of 2020 in which customers making cash purchases of gasoline at Save-Always Gas Bars are issued rewards in the form of grocery coupons. For each litre of gasoline purchased, the customer gets a grocery coupon for 3.20 cents that can be redeemed in Save-Always Food Stores. The coupons have no expiry date. Save-Always Stores began selling gift cards in 2021 that do not have expiry dates. The following are selected transactions in 2020 and 2021: 1. 2. 3. 4. 5. In 2020, the Gas Bars sold 3.60 million litres of gasoline resulting in gas sales of $4,320,000. Grocery coupons were issued with these sales. The expected redemption rate for the grocery coupons is 70%. In 2020, customers redeemed $53,800 of the grocery coupons in the Food Stores. In 2021, the Gas Bars sold 5.10 million litres of gasoline resulting in gas sales of $6,630,000. Grocery coupons were issued with these sales. The expected redemption rate for the grocery coupons is 76%. In 2021, customers redeemed $59,000 of the grocery coupons in the Food Stores. In 2021, customers purchased $93,000 of gift cards, and $50,500 of the revenue from gift card sales was to be recorded by the end of the year.
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