Cheyenne offers an MP3 download (seven-single medley) as a premium for every 6 candy bar wrappers presented by customers together with $2.60. The candy bars are sold by the company to distributors for 30 cents each. The purchase price of each download code to the company is $2.35. In addition, it costs 50 cents to distribute each code. The results of the premium plan for the years 2020 and 2021 are as follows. (All purchases and sales are for cash.) 2020 2021 MP3 codes purchased 270,000 356,400 Candy bars sold 2,993,500 2,832,900 Wrappers redeemed 1,296,000 1,620,000 2020 wrappers expected to be redeemed in 2021 313,200 2021 wrappers expected to be redeemed in 2022 378,000 Collapse question part (a) Prepare the journal entries that should be made in 2020 and 2021 to record the transactions related to the premium plan of the Cheyenne. (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 the amount is entered. Do not indent manually. Round answers to 0 decimal places, e.g. 1,525.) Account Titles and Explanation Debit Credit Entry field with the correct answer Entry field with the correct answer Entry field with the correct answer Entry field with the correct answer Entry field with the correct answer Entry field with the correct answer (To record the premium inventory.) Entry field with the correct answer Entry field with the correct answer Entry field with the correct answer Entry field with the correct answer Entry field with the correct answer Entry field with the correct answer (To record the sales.) Entry field with the correct answer Entry field with the correct answer Entry field with the correct answer Entry field with the correct answer Entry field with the correct answer Entry field with the correct answer Entry field with the correct answer Entry field with the correct answer Entry field with the correct answer (To record the expense associated with the sale.) Entry field with the correct answer Entry field with the correct answer Entry field with the correct answer Entry field with the correct answer Entry field with the correct answer Entry field with the correct answer (To record the premium liability.) Entry field with the correct answer Entry field with the correct answer Entry field with the correct answer Entry field with the correct answer Entry field with the correct answer Entry field with the correct answer (To record the premium inventory.) Entry field with the correct answer Entry field with an incorrect answer Entry field with the correct answer Entry field with the correct answer Entry field with the correct answer Entry field with an incorrect answer (To record the sales.) Entry field with the correct answer Entry field with the correct answer Entry field with the correct answer Entry field with the correct answer Entry field with an incorrect answer Entry field with the correct answer Entry field with the correct answer Entry field with an incorrect answer Entry field with the correct answer Entry field with the correct answer Inventory of Premiums Entry field with the correct answer Entry field with the correct answer (To record the expense associated with the sale.) Entry field with the correct answer Entry field with a correct answer Entry field with the correct answer Entry field with the correct answer Entry field with the correct answer Entry field with the incorrect answer (To record the premium liability.)
Cheyenne offers an MP3 download (seven-single medley) as a premium for every 6 candy bar wrappers presented by customers together with $2.60. The candy bars are sold by the company to distributors for 30 cents each. The purchase price of each download code to the company is $2.35. In addition, it costs 50 cents to distribute each code. The results of the premium plan for the years 2020 and 2021 are as follows. (All purchases and sales are for cash.)
2020 2021
MP3 codes purchased 270,000 356,400
Candy bars sold 2,993,500 2,832,900
Wrappers redeemed 1,296,000 1,620,000
2020 wrappers expected to be redeemed in 2021 313,200
2021 wrappers expected to be redeemed in 2022 378,000
Collapse question part
(a)
Prepare the
Account Titles and Explanation Debit Credit
Entry field with the correct answer
Entry field with the correct answer
Entry field with the correct answer
Entry field with the correct answer
Entry field with the correct answer
Entry field with the correct answer
(To record the premium inventory.)
Entry field with the correct answer
Entry field with the correct answer
Entry field with the correct answer
Entry field with the correct answer
Entry field with the correct answer
Entry field with the correct answer
(To record the sales.)
Entry field with the correct answer
Entry field with the correct answer
Entry field with the correct answer
Entry field with the correct answer
Entry field with the correct answer
Entry field with the correct answer
Entry field with the correct answer
Entry field with the correct answer
Entry field with the correct answer
(To record the expense associated with the sale.)
Entry field with the correct answer
Entry field with the correct answer
Entry field with the correct answer
Entry field with the correct answer
Entry field with the correct answer
Entry field with the correct answer
(To record the premium liability.)
Entry field with the correct answer
Entry field with the correct answer
Entry field with the correct answer
Entry field with the correct answer
Entry field with the correct answer
Entry field with the correct answer
(To record the premium inventory.)
Entry field with the correct answer
Entry field with an incorrect answer
Entry field with the correct answer
Entry field with the correct answer
Entry field with the correct answer
Entry field with an incorrect answer
(To record the sales.)
Entry field with the correct answer
Entry field with the correct answer
Entry field with the correct answer
Entry field with the correct answer
Entry field with an incorrect answer
Entry field with the correct answer
Entry field with the correct answer
Entry field with an incorrect answer
Entry field with the correct answer
Entry field with the correct answer
Inventory of Premiums
Entry field with the correct answer
Entry field with the correct answer
(To record the expense associated with the sale.)
Entry field with the correct answer
Entry field with a correct answer
Entry field with the correct answer
Entry field with the correct answer
Entry field with the correct answer
Entry field with the incorrect answer
(To record the premium liability.)
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