1. Beginning the year 2020,Polk Company beganmarketing a new beer called"Serbesa". To help promotethe product, the managementof Polk is offering a specialSerbesa beer mug to eachcustomer for every 20specially marked bottles ofSerbesa. Polk estimates thatout of the 300,000 bottles ofSerbesa sold during 2020, only30% of the bottle caps will beredeemed. For the year 2020,5,000 beer mugs wereordered by the company at atotal cost of P140,000. A totalof 4,000 mugs were alreadydistributed to customers.What is the amount of theliability that Polk should reporton its December 31, 202Ostatement of financialposition? 2. Refer to the precedingproblem. How much is thepremium expense reported onPolk's profit or loss for the yearended December 31, 2020? *

Gift means the product given free of cost to the customer on fulfilling the certain conditions. It…

Answered: 1. Beginning the year 2020, Polk…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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