Comparing the entries made by the company and your should be entries, prepare one compound entry to adjust the affected accounts considering the books are still open. (On the space provided below, write the total amount of the credit side of your entry) Present the COMPLETE ADJUSTING ENTRY in your solutions LEMON, Inc. inaugurated a new sales promotional program. For every 15 cereal box topsreturned to LEMON, customers will receive an attractive prize. LEMON estimates that only 25%of the cereal box tops reaching the customers will be redeemed.Sale of cereal boxes (585,000 units)Purchase of prizes (12,000 units)Prizes distributed to customer, in units15,795,000216,0008,000The accountant of LEMON, Inc. journalized the purchase of prizes as: Debit to PREMIUMEXPENSE and a Credit to CASH. He just prepared a memo entry for prizes distributed.

Journal entries 1). To record Purchase Purchase A/c debit 216,000 To bank a…

Comparing the entries made by the company and your should be entries, prepare one compound entry to adjust the affected accounts considering the books are still open. (On the space provided below, write the total amount of

Comparing the entries made by the company and your should be entries, prepare one compound entry to adjust the affected accounts considering the books are still open. (On the space provided below, write the total amount of

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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Question

LEMON, Inc. inaugurated a new sales promotional program. For every 15 cereal box tops
returned to LEMON, customers will receive an attractive prize. LEMON estimates that only 25%
of the cereal box tops reaching the customers will be redeemed.
Sale of cereal boxes (585,000 units)
Purchase of prizes (12,000 units)
Prizes distributed to customer, in units
15,795,000
216,000
8,000
The accountant of LEMON, Inc. journalized the purchase of prizes as: Debit to PREMIUM
EXPENSE and a Credit to CASH. He just prepared a memo entry for prizes distributed.

Definition Definition Entries made at the end of every accounting period to precisely replicate the expenses and revenue of the current period. This is also known as end of period adjustment. It can also refer to financial reporting that corrects errors made previously in the accounting period. Every adjustment entry affects at least one real account and one nominal account.

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