Problem 2-21 (IAA)Choco Company, a high street chain, is offering a promotionwhereby a customer who purchases three boxes of chocolatesat P200 per box in a single transaction receives a coupon forone free box of chocolates if the customer fills out a requestform and mails it before a set expiration date. It is expectedthat 75% of the coupons will be redeemed.During 2022, the entity sold 30,000 boxes of chocolates atP200 per box or P6,000,000.During 2023, the entity delivered 6,000 additional free boxesof chocolates to the customers.1. What amount should be reported as stand-alone sellingprice of the free product coupons?a. 1,500,000b. 2,000,000750,000500,000C.d.2. What amount of the transaction price should be allocatedto the free product coupons?a. 1,000,000b. 1,200,000C.d.500,000600,0003. What amount should be reported as sales revenue in 2022?a. 6,000,000b. 3,000,000c. 4,800,000d. 2,400,0004. What amount should be reported as sales revenue fromthe delivery of free products in 2023?a. 900,000b. 600,000c. 480,000d. 720,000

#requirement 3 and 4 have been answered. Sales revenue during 2022 would be the revenue yielding…

3. What amount should be reported as sales revenue in 2022? a. 6,000,000 b. 3,000,000 c. 4,800,000 d. 2,400,000 4. What amount should be reported as sales revenue from the delivery of free products in 2023? a. 900,000 b. 600,000 c. 480,000 d. 720,000

3. What amount should be reported as sales revenue in 2022? a. 6,000,000 b. 3,000,000 c. 4,800,000 d. 2,400,000 4. What amount should be reported as sales revenue from the delivery of free products in 2023? a. 900,000 b. 600,000 c. 480,000 d. 720,000

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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PROBLEM 2 During 2020, ABC Co. sold 100,000 boxes of cake mix under a new sales promotional program. Each box contains one coupon. These coupons entitle the customer to a baking pan upon remittance of ten coupons and P350. The entity pays P500 per pan and P25 for handling and shipping. The entity estimated that 80% of the coupons will be redeemed even though only 50,000 coupons had been presented during 2020. Compute for the estimated liability on December 31, 2020
Anton Company sells one dozen doughnuts for P500 per box. There is a promotion wherein if a customer buys 3 boxes in a single transaction, a customer received a coupon for one additional box for free. Customers can redeem coupons at any time following the month of sale of the 3 boxes before the expiration date. It is expected 60% of the customers will redeem the coupons. During 2022, the entity sold 15,000 boxes at P500 per box or P7,500,000. During 2023, the entity delivered 2,000 free additional boxes to the customers. Required: 1. Compute the stand-alone selling price of the coupons. 2. Allocate the transaction price to the products sold and the coupons. 3. Prepare the journal entry to record the sale of the products and issue of the free product coupons in 2022 4. Prepare the journal entry to record the delivery of 2,000 free additional boxes in 2023.
Problem 2-24 (IFRS) Alyanna Company operates a customer loyalty program. The entity grants program members loyalty points when they spend a specified amount on purchases. Program members can redeem the points for further purchases. The points have no expiry date. During 2022, the customer earned 60,000 points. Management expects that 100% of these points will be redeemed. The stand-alone selling price of each loyalty point is estimated at P20. The sales during 2022 amounted to P6,800,000 based on stand-alone selling price. On December 31, 2022, 28,800 points have been redeemed in exchange for purchases. In 2023, the management revised expectations and now expects 90% of the points to be redeemed. In 2023, the entity redeemed 9,000 points. 1. What amount of the transaction price should be allocated to the points? a. 1,800,000 b. 1,200,000 c. 1,020,000 d. 0 2. What amount should be reported as revenue earned from loyalty points for 2022? a. 576,000 b. 489,600 c. 510,000 d. 0 3. What…
Problem 2. Sedum Inc. includes coupons that may be presented at retail stores to obtain discounts on other Sedum products. Retailers are reimbursed for the face amount of coupons redeemed plus 10% of that amount for handling costs. Sedum honors requests for coupon redemption by retailers up to 3 months after the consumer expiration date. Sedum estimates that 60% of all coupons will ultimately be redeemed. Information relating to coupons issued by Sedum during 2021 are as follows: Consumer expiration date 2020 December 31,
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Victoria Company sells bedsheets for P3,000 per set. There is a promotion wherein if a customer buys 4 sets in a single transaction, the customer receives a coupon for one additional set for free. Customers should go to the entity's website, fill out a request form, input the coupon number and submit online before the expiration date. It is expected that 80% of the coupons will be redeemed. During 2022, the entity sold 1,000 sets at P3,000 per set or P3,000,000. During 2023, the entity delivered 75 free additional sets. Compute the deferred revenue from coupons on December 31, 2023.
Problem 2-17 (AICPA Adapted) During the current year, Day Company sold 500,000 boxes of cake mix under a new sales promotional program. Each box contained one coupon, which entitled the customer to a baking pan upon remittance of P40. The entity paid P50 per pan and P5 for handling and shipping. The entity estimated that 80% of the coupons will be redeemed, even though only 300,000 coupons had been processed during the current year. 1. What amount should be reported as premium expense for current year? a. 6,000,000 b. 7,500,000 c. 4,500,000 d. 2,000,000 2. What amount should be reported as liability for unredeemed coupons at year-end? a. 1,000,000 b. 1,500,000 c. 3,000,000 d. 5,000,000 Problem 2-18 (IAA) Clam Company offers customers a pottery cereal bowl if they send in three boxtops from its products and P10. The entity estimated that 60% of the boxtops will be redeemed. During the current year, the entity sold 675,000 boxes and customers redeemed 330,000 boxtops receiving 110,000…
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Marin Shed Solutions sells its largest shed for $1,100 plus HST of 13 %. On May 10, 2024, it sold 26 of these sheds. On May 17,2024, the company sold 85 of these sheds. All sales are cash sales. For each day's sales, calculate the HST. May 10, 2024 May 17, 2024 Question Part Score $ Date $ HST payable Prepare a journal entry to record the sales. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entries before credit entries. Record journal entries in the order presented in the problem.) Account Titles Debit --/2 Credit
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3 Antonio's Car Services provides maintenance services for motorized vehicles. In March 2024, Rick placed an order for a new set of tires for $350. When a customer purchases goods or services in excess of $300, Antonio's gives the customer a 25% discount coupon for future purchases made in the next three months. Antonio's estimates that approximately 80% of customers utilize the coupon and that on average those customers will purchase goods or services that typically sell for $75 a. How many performance obligations are in Rick's contract? b. number of perofmrance obligations because tire's and coupons 2 * note * order placed - tires 350 purchased goods & services 300 * discount coupon 25% * customers used coupon 80% * goods sell 75 Prepare a journal entry to record revenue for this transaction, assuming that Antonio's uses the residual method to estimate the stand-alone selling price of new tires sold without the discount coupon Record the revenue assuming that Antonio's uses the…