9/1/21 Made various board sales totaling $360,000 on account for 500 boards. In order to entice off-season sales to the fans of our logo-encrypted boards, we offered a coupon for 50% off an NCAA football ticket normally costing $200. It is estimated that 80% of the tickets will be redeemed by December 31, 2021. Each board normally sells for $720. The cost of the boards was $151,000. Use the gross method to record the sale.
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9/1/21 Made various board sales totaling $360,000 on account for 500 boards. In
order to entice off-season sales to the fans of our logo-encrypted boards, we
offered a coupon for 50% off an NCAA football ticket normally costing $200.
It is estimated that 80% of the tickets will be redeemed by December 31,
2021. Each board normally sells for $720. The cost of the boards was
$151,000. Use the gross method to record the sale.
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- Bezamon Shoes Shop has a customer loyalty program in which it issues points to customers for every cash purchase that can be applied to future purchases. For every dollar spent, a customer receives one point. Each point is worth three cents. There is no expiry date on the points. Bezamon estimates that 30% of the points issued will eventually be redeemed. The program was started in 2020. During 2020, 8oo,000 points were issued. Sales for 2020 were $400,000. In 2021, 1.3 million points were issued. Total sales for 2021 were $500,000. Bezamon has a December 31 year end. Required: 1. What is the stand-alone value of the points issued in 2020? In 2021? 2. Prepare the journal entries to record the sales for 2020 and 2021. 3. When the points are redeemed, how is this accounted for? What is the impact of the point redemptions on profit and cash flow?Sunland Candy Company offers a coffee mug as a premium for every ten $1 candy bar wrappers presented by customers together with $2. The purchase price of each mug to the company is $2.40; in addition it costs $1.60 to mail each mug. The results of the premium plan for the years 2020 and 2021 are as follows (assume all purchases and sales are for cash): 2020 2021 Coffee mugs purchased 750,000 820,000 Candy bars sold 5,600,000 6,760,000 Wrappers redeemed 2,700,000 4,250,000 2020 wrappers expected to be redeemed in 2021 1,900,000 2021 wrappers expected to be redeemed in 2022 2,680,000 Part 1 Partially correct answer icon Your answer is partially correct. Prepare the general journal entries that should be made in 2020 and 2021 related to the above plan by Sunland Candy. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit…Sunland Candy Company offers a coffee mug as a premium for every ten $1 candy bar wrappers presented by customers together with $2. The purchase price of each mug to the company is $2.40; in addition it costs $1.60 to mail each mug. The results of the premium plan for the years 2020 and 2021 are as follows (assume all purchases and sales are for cash): 2020 2021 Coffee mugs purchased 750,000 820,000 Candy bars sold 5,600,000 6,760,000 Wrappers redeemed 2,700,000 4,250,000 2020 wrappers expected to be redeemed in 2021 1,900,000 2021 wrappers expected to be redeemed in 2022 2,680,000 Part 1 Prepare the general journal entries that should be made in 2020 and 2021 related to the above plan by Sunland Candy. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit 2020 (To record…
- Dairy, Inc. offered an ice cream scoop in exchange for 8 labels of ice cream and $3.00. The ice cream scoops cost $7.00 each. Experience indicates that 45% of the coupons will be redeemed. Customers can redeem the coupons, receipts and cash through February 28, 2021. Dairy, Inc. sold 40,000 gallons of ice cream. 15,000 of the coupons were redeemed in 2020. What is the amount of premium expense to be recognized on the income statement for the year ended 2020? If all of the remaining ice cream scoops were issued in 2021, what is the amount of the premium expense to be recognized in 2021? What is the amount of the premium liability as of 12/31/20? Please provide a detailed explanation.Martz Inc. has a customer loyalty program that rewards a customer with 1 customer loyalty point for every $10 of purchases. Each point is redeemable for a $3 discount on any future purchases. On July 2, 2020, customers purchase products for $300,000 (with a cost of $171,000) and earn 30,000 points redeemable for future purchases. Martz expects 25,000 points to be redeemed. Martz estimates a standalone selling price of $2.50 per point (or $75,000 total) on the basis of the likelihood of redemption. The points provide a material right to customers that they would not receive without entering into a contract. As a result, Martz concludes that the points are a separate performance obligation. Instructions a. Determine the transaction price for the product and the customer loyalty points. b. Prepare the journal entries to record the sale of the product and related points on July 2, 2020. c. At the end of the first reporting period (July 31, 2020), 10,000 loyalty points are…As part of a promotion campaign, Funzy Cereal includes one coupon in each issue of various national magazines and offers a toy car in exchange for $1.00 and three coupons. The cars cost Funzy $1.50 each. Experience indicates that 4% of the coupons eventually will be redeemed. During the last month of 2021, the first month of the offer, 12 million coupons were distributed and 240,000 of the coupons were redeemed. Funzy recognizes coupon promotion expense in the period coupons are issued. What amount should Funzy report as coupon promotion expense on its income statement for the year ended December 31, 2021?
- Stellar Company offers a set of building blocks to customers who send in 3 UPC codes from Stellar cereal, along with 60¢. The block sets cost Stellar $0.90 each to purchase and 60¢ each to mail to customers. During 2025, Stellar sold 1,344,000 boxes of cereal. The company expects 30% of the UPC codes to be sent in. During 2025, 134,400 UPC codes were redeemed. Prepare Stellar's December 31, 2025, adjusting entry. (If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. List all debit entries before credit entries.) Account Titles and Explanation DebitVictoria 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 2021, the entity sold 1,000 sets at P3,000 per set or P3,000,000. During 2022, the entity delivered 75 free additional sets. Required: 1. Compute the stand-alone price of the coupons. 2. Allocate the transaction price to the products sold and the coupons. 3. Prepare journal entries for 2021 and 2022. 4. Compute the deferred revenue from coupons on December 31, 2022.(Customer Loyalty Program) Martz Inc. has a customer loyalty program that rewards a customer with 1 customer loyalty point for every $10 of purchases. Each point is redeemable for a $3 discount on any future purchases. On July 2, 2017, customers purchase products for $300,000 (with a cost of $171,000) and earn 30,000 points redeemable for future purchases. Martz expects 25,000 points to be redeemed. Martz estimates a standalone selling price of $2.50 per point (or $75,000 total) on the basis of the likelihood of redemption. The points provide a material right to customers that they would not receive without entering into a contract. As a result, Martz concludes that the points are a separate performance obligation.Instructions(a) Determine the transaction price for the product and the customer loyalty points.(b) Prepare the journal entries to record the sale of the product and related points on July 2, 2017.(c) At the end of the first reporting period (July 31, 2017), 10,000 loyalty…
- Waterway Company offers a set of building blocks to customers who send in 3 UPC codes from Waterway cereal, along with 50¢. The block sets cost Waterway $1.00 each to purchase and 60¢ each to mail to customers. During 2025, Waterway sold 960,000 boxes of cereal. The company expects 30% of the UPC codes to be sent in. During 2025, 96,000 UPC codes were redeemed. Prepare Waterway's December 31, 2025, adjusting entry. (If no entry is required, select "No Entry for the account titles and enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. List all debit entries before credit entries.) Credit Account Titles and Explanation Premium Expense Premium Liability Debit 105600 105600Star Company is offering a promotion whereby a customer who purchases three boxes of chocolates at P200 per box in a single transaction receives a coupon for one free box of chocolates if the customer fills out a request form and mails it before a set expiration date. It is expected that 75% of the coupons will be redeemed.During 2021, the entity sold 60,000 boxes of chocolates at P200 per box or P12,000,000. During 2022, the entity delivered 12,000 additional free boxes of chocolates to the customers.A. What amount should be reported as stand-alone selling price of the free product coupons? 1,500,000 4,000,000 1,000,000 3,000,000 B. What amount should be reported as sales revenue from the delivery of free products in 2022? 1,800,000 1,440,000 1,200,000 720,000 C. What amount should be reported as sales revenue in 2021? 12,000,000 6,000,000 4,800,000 9,600,000XYZ Inc offers a gift set to customers who send in $1.11 plus three coupon codes obtained from the purchase of the company's standard products. That is, a customer purchases three standard products which come with a coupon each, sends everything in along with the cheque for the amount above, and receives the gift set in the mail a few weeks later. During the year, the company acquired an adequate number of gift sets for $2.63 each using cash to meet the promotion's demand. During the year, the company sold 1,062,960 of its standard products for $4.15 each. The company estimated that 10% of the sales amount received from customers would relate to the gift set to be awarded. The company would expect 34.31% of the coupons to be sent in eventually, and, during the year, 255,110 coupons were redeemed. If the company followed IFRS using the revenue approach, how much unearned revenue would be shown as a liability at the end of the year for the coupons yet to be redeemed? a. $139,185 b.…
