ALMOND Bottling Corporation embarked on a promotional program whereby a can opener costing ₱13 each is given away for every 10 bottle crowns returned plus ₱5. ALMOND also pays ₱2 per can opener for handling and shipping cost. ALMOND estimates that only 40% of the bottle crowns in the hands of consumers will be presented for redemption. The following information is available: Bottles sold - 1,000,000 units amounting to ₱5,000,000; Can openers bought for giveaways - 15,000 units amounting to ₱195,000; Can openers distributed to customers - 10,000 units. At the close of the first year, how much should ALMOND recognize as estimated liability for promotional items outstanding?
ALMOND Bottling Corporation embarked on a promotional program whereby a can opener costing ₱13 each is given away for every 10 bottle crowns returned plus ₱5. ALMOND also pays ₱2 per can opener for handling and shipping cost. ALMOND estimates that only 40% of the bottle crowns in the hands of consumers will be presented for redemption. The following information is available: Bottles sold - 1,000,000 units amounting to ₱5,000,000; Can openers bought for giveaways - 15,000 units amounting to ₱195,000; Can openers distributed to customers - 10,000 units. At the close of the first year, how much should ALMOND recognize as estimated liability for promotional items outstanding?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
ALMOND Bottling Corporation embarked on a promotional program whereby a can opener costing ₱13 each is given away for every 10 bottle crowns returned plus ₱5. ALMOND also pays ₱2 per can opener for handling and shipping cost. ALMOND estimates that only 40% of the bottle crowns in the hands of consumers will be presented for redemption. The following information is available: Bottles sold - 1,000,000 units amounting to ₱5,000,000; Can openers bought for giveaways - 15,000 units amounting to ₱195,000; Can openers distributed to customers - 10,000 units. At the close of the first year, how much should ALMOND recognize as estimated liability for promotional items outstanding?
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 3 steps
Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education