ABC Company includes one coupon in each box of laundry soap it sells. A towel is offered as premium to customers who send in 10 coupons and a remittance of P20. Data of the premium offer are: 2019 2020 Boxes of soap sold 500,000 800,000 No. of towels purchased (P100 per towel) 20,000 25,000 Coupons redeemed 140,000 200,000 ABC Company's experience indicates that only 30% of the coupons will be redeemed. How much is the estimated liability for premiums on December 31, 2020? Round answer to whole number.

ABC Company includes one coupon in each box of laundry soap it sells. A towel is offered as premium to customers who send in 10 coupons and a remittance of P20. Data of the premium offer are: 2019 2020 Boxes of soap sold 500,000 800,000 No. of towels purchased (P100 per towel) 20,000 25,000 Coupons redeemed 140,000 200,000 ABC Company's experience indicates that only 30% of the coupons will be redeemed. How much is the estimated liability for premiums on December 31, 2020? Round answer to whole number.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter9: Current Liabilities And Contingent Obligations

Section: Chapter Questions

Problem 16P: Premium Obligation Yummy Cereal Company is offering one toy shovel set for 15 box tops of its...

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Charlene includes one coupon in each box of laundry soap it sells. A towel is offered as premium to customers who send in 10 coupons and a remittance of P10. Distribution cost of premium is P5. Experience indicates that only 30% of the coupons will be redeemed.2021Boxes of soap sold - 2,000,000.00Number of towels purchased at P50 each - 50,000Coupons redeemed - 400,0002022Boxes of soap sold - 2,500,000.00Number of towels purchased at P50 each - 80,000Coupons redeemed - 700,000What is the amount of Premium Expense for 2021?What is the premium expense for 2022?What is the premium liability on December 31, 2022?
Xoiswa Company manufactures a product that is packaged and sold. A plate is offered to customers sending in three wrappers accompanied by a remittance of P10. Data with respect to the premium offer are summarized below: 2018 2019 Sales 3,600,000 4,200,000 Purchase of premium, P50 per plate 390,000 580,000 Number of plates distributed as premiums 5,000 9,000 Estimated number of plates to be distributed in next period 2,000 3,000 Distribution cost P20 per plate What is the premium expense for 2019?
Miracle Company manufactures a product that is packaged and sold. Each sale is accompanied by 3 coupons to be able to purchase a plate. A plate is offered to customers sending two coupons accompanied by a remittance of P2. 2018 2019 Sale @ 250 Purchase of premium, P10 per plate Number of plates distributed as premiums Premiums distributed Distribution cost P5 per plate QUESTIONS: 4,200,0003,600,000 580,000 390,000 80% 70% 17,000 13,000 1) What is the premium expense for 2018? 2) How much is the premium liability as of December 31, 2019?
WET Company includes one coupon in each package of cereal it sells. A towel is offered as a premium to customerswho send in 10 coupons. Data for the premium offer are: 2019 2020Packages of cereal sold 500,000 800,000Number of towels purchased at P40 per towel 30,000 60,000Number of towels distributed as premium 20,000 50,000Number of towels to be distributed as premiumnext period 5,000 3,000In its 2020 statement of comprehensive income, WET Company should report premium expense of:a. P2,400,000 b. P2,000,000 c. P2,120,000 d. P1,920,000
Advisory Company includes one coupon in each box of laundry soap it sells. A towel is offered as a premium to customers who send in 10 coupons and a remittance of P5. Data for the premium offer are: 2007 2008 Boxes of soap sold 1,000,000 1,500,000 Number of towels purchased at P50 per towel 40,000 65,000 Number of towels distributed as premium 35,000 58,000 Number of towels to be distributed as premium next period 3,000 5,000 In its 2008 income statement, Advisory Company should report premium expense at O 3,000,000 O 2,835,000 O 2,700,000 O None of these O 2,610,000
Miracle Company manufactures a product that is packaged and sold. A plate is offered to customers sending in three wrappers accompanied by a remittance of P10. Data with respect to the premium offer are summarized below. 2020 2021 Sales 3,600,000 4,200,000 Purchase of premium, P50 per plate 390,000 580,000 Number of plates distributed as premiums 5,000 9,000 Estimated number of plates to be distributed in subsequent period 2,000 3,000 Distribution cost is P20 per plate Required: Prepare journal entries that would be made in 2020 and 2021 to record sales, premium purchases and redemptions, and year-end adjustments.
Use the information for the next four (4) questions. BCD Company included one coupon in each box of cereal sold. A bowl was offered as a premium to customers who send in 15 coupons and a remittance of P15. Distribution cost of premium is P7.5. Experience indicated that only 30% of the coupons will be redeemed. 2020 2021 Boxes of cereal sold 3,000,000 3,750,000 Number of bowls purchased at P75 each 75,000 120,000 Coupons redeemed 600,000 1,050,000 A.) What is the premium expense for 2020? B.) What is the premium liability on December 31, 2020? C.) What is the premium expense for 2021? D.) What is the premium liability on December 31, 2021?
Use the information for the next four (4) questions. ABC Company included one coupon in each box of cereal sold. A bowl was offered as a premium to customers who send in 15 coupons and a remittance of P15. Distribution cost of premium is P7.5. Experience indicated that only 30% of the coupons will be redeemed. 2020 2021 Boxes of cereal sold 3,000,000 3,750,000 Number of bowls purchased at P75 each 75,000 120,000 Coupons redeemed 600,000 1,050,000 1. What is the premium expense for 2020? 2. What is the premium liability on December 31, 2020? 3. What is the premium expense for 2021? 4. What is the premium liability on December 31, 2021?
ABC Company includes 1 coupon in each box of coffee it sells. A planner is offered as a premium to customers who send in 10 coupons and a remittance of P10. Distribution cost of premium is P5. Experience indicates that only 30% of the coupons will be redeemed. Boxes of coffee sold: 2022 - 800,000; 2023 - 1,000,000 No. of planners purchased at P150 each: 2022 - 20,000; 2023 - 32,000 Coupons redeemed: 2022 - 160,000; 2023 - 280,000 What is the premium expense for 2022?
Marichu Company manufactures a special product. To promote the sale of the product, a premium is offered to customers who send in three wrappers and a remittance of P25. The distribution cost per premium is P5. 5,000 and 7,000 premiums were purchased in 2021 and 2022 respectively. Data for the premiums are: 2021 2022 Sales P20,000,000 P25,000,000 Premiums purchased P400,000 P560,000 Number of premiums distributed 4,000 5,500 Number of premiums to be distributed next period 300 500 The premium expense for 2022 should be
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.
Muggs Co. includes one coupon in each bag of dog food it sells. In return for eight coupons, customers receive a leash. The leashes cost Muggs $4 each. Muggs estimates that 45 percent of the coupons will be redeemed. Data for 2025 and 2026 are as follows: 2025 2026 Bags of dog food sold 500,000 600,000 Leashes purchased 18,000 22,000 Coupons redeemed 120,000 150,000 The premium expense for 2025 is $250,000. $112,500. $100,000. O $60,000.