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.

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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A.P75,000 and P 75,000 B.P 135,000 and P 135,000 C.P 210, 000 and P 75,000 D.P 135,000 and P 210,000
Marigold Company includes one coupon in each box of soap powder that it packs, and 10 coupons are redeemable for a premium (a kitchen utensil). In 2020, Marigold Company purchased 9,100 premiums at 75 cents each and sold 101,000 boxes of soap powder at $ 3.60 per box; 40,800 coupons were presented for redemption in 2020. It is estimated that 60% of the coupons will eventually be presented for redemption.Prepare all the entries that would be made relative to sales of soap powder and to the premium plan in 2020. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)
Creative Computing sells a tablet computer called the Protab. The $785 sales price of a Protab Package includes the following: One Protab computer. • A 6-month limited warranty. This warranty guarantees that Creative will cover any costs that arise due to repairs or replacements associated with defective products for up to six months. ● • A coupon to purchase a Creative Probook e-book reader for $425, a price that represents a 50% discount from the regular Probook price of $850. It is expected that 20% of the discount coupons will be utilized. • A coupon to purchase a one-year extended warranty for $55. Customers can buy the extended warranty for $55 at other times as well. Creative estimates that 45% of customers will purchase an extended warranty. Creative does not sell the Protab without the limited warranty, option to purchase a Probook, and the option to purchase an extended warranty, but estimates that if it did so, a Protab alone would sell for $765. All Protah salos r ●
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
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Progress Limited sells power generator sets on an instalment sales basis. The terms of payment are as follows: Cash price: Deposit: Interest: Instalments: R1 500 per set 20% of cash price per set 20% per annum 35 monthly payments of R54 and a final payment of R30. The cost price per set amounted to R900, and 200 sets were sold during the year ended 30 June 2006. Instalments totalling R64 800 were received. Profit is regarded as realised in the year of sale, but finance charges are written off on the basis of the ratio of instalments received to total instalments. Required (a) Show the following accounts: instalment sales debtors; instalment sales trading account; and interest suspense account (b) Show how instalment sales debtors will be reflected in the balance sheet at 30 June 2006. Guidelines: All answers must be typed out and workings must be showing.
Pharoah sells 100 nonrefundable $50 gift cards for 3D printer paper on February 28, 2020. The paper has a standalone selling price of $50 (cost $36). The gift cards expiration date is June 30, 2020. Pharoah estimates that customers will not redeem 10% of these gift cards. The pattern of redemption is as follows. Redemption Total March 31 30 % April 30 75 June 30 90
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ABC Company sold 10 units of goods with a unit list price of P2,000 on January 1, 2020. Given that the trade discount is 5% and the cash discount is 10%, and that the cash discount period is 10 days and the credit period is 30 days, if the customer settles the debt on January 11, 2020, what is the actual payments he needs to pay
Sheffield Corp. includes one coupon in each bag of dog food it sells. In return for eight coupons, customers receive a leash. The leashes cost Sheffield $5 each. Sheffield estimates that 40 percent of the coupons will be redeemed. Data for 2020 and 2021 are as follows: 2020 2021 Bags of dog food sold 520000 620000 Leashes purchased 19000 21000 Coupons redeemed 130000 130000 The premium liability at December 31, 2020 is O S73750. O $48750. O $63750. O $85750.
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Mammoth Publishing, Incorporated owns a weekly magazine called “Nova Health,” and sells annual subscriptions for $86. Customers prepay their subscription fee and receive 52 issues starting in the following month. The company also offers new subscribers a 30% discount coupon on its other weekly magazine called “Fishing & Camping,” which has a list price of $70 for an annual subscription. Mammoth estimates that approximately 10% of the discount coupons will be redeemed.\\n\\nRequired:\\n(a) How many performance obligations are in a single subscription contract?\\n\\n(b) Prepare the journal entry to account for one new subscription of “Nova Health,” clearly identifying the revenue or deferred revenue associated with each performance obligation.