Advisory Company inciudes one coupon in each of laundry soap sells. A towel is offered as a premium customers who send in 1o 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

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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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
Transcribed Image Text: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
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