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 expense for the promotional program?
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 expense for the promotional program?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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 expense for the promotional program?
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