Compute Premium Liability in 2019.
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Cyma Cola Company sells boxes of Cola for $10 per box. In addition, Cyma Cola offers its customers a drinking mug in exchange for $1 and 10 Cola box tops. The cost of drinking mug is $3, and the company estimates that customers will redeem 60 percent of the box tops. The premium offer began in June 2019. During 2019 Cyma Cola Company purchased 20,000 Drinking Mugs at $2 for each, and sold 300,000 boxes of Cola for $10 per box, and redeemed 60,000 box tops. Compute Premium Liability in 2019.
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- Value Dealership Inc. markets and sells the vehicles to retail customers. Along with a new vehicle purchase, a customer will receive a free annual maintenance contract for one year from the date of purchase. The standalone selling price of a vehicle is $30,000 and the standalone selling price for the annual maintenance contract is $500. During October 2020, Value Dealership Inc. sold 72 vehicles for $30,250 per vehicle, each with a free annual maintenance contract. Note: Carry all decimals in calculations; round the final answer to the nearest dollar. a.) Ignoring the cost entries, record the journal entry in October 2020 for Value Dealership’s sale of vehicles with the associated maintenance contracts to customers. b.) Assume the same information above except that the standalone selling price of the annual maintenance contract is not known because this was the first time Value Dealership offered the service. Value Dealership is uncertain as to what services, on average, a customer…Carla Corporation sells DVD players. The corporation also offers its customers a 4-year warranty contract. During 2020, Carla sold 20,000 warranty contracts at $132 each. The corporation spent $173,000 servicing warranties during 2020, and it estimates that an additional $865,000 will be spent in the future to service the warranties. Prepare Carla’s journal entry for the sale of contracts. Assume the service costs are inventory costs Prepare Carla’s journal entry for the cost of servicing the warranties. Assume the service costs are inventory costs Prepare Carla’s journal entry for the recognition of warranty revenue. Assume the service costs are inventory costs.Higgins Candy Company offers a coffee mug as a premium for every ten $1 candy bar wrappers presented by customers together with $2. The purchase price of each mug to the company is $2.40; in addition it costs $1.60 to mail each mug. The results of the premium plan for the years 2020 and 2021 are as follows (assume all purchases and sales are for cash): Coffee mugs purchased Candy bars sold Wrappers redeemed 2020 wrappers expected to be redeemed in 2021 2021 wrappers expected to be redeemed in 2022 Instructions 2020 720,000 5,600,000 2.800.000 2,000,000 2021 800,000 6,750,000 4,200,000 2.700,000 (a) Prepare the general journal entries that should be made in 2020 and 2021 related to the above plan by Higgins Candy. (b) Indicate the account names, amounts, and classifications of the items related to the premium plan that wo appear on the Higgins Candy Company balance sheet and income statement at the end of 2020 and 2021.
- Larkspur Inc. sells prepaid telephone cards to customers. Larkspur then pays the telecommunications company, TeleExpress, for the actual use of its telephone lines related to the prepaid telephone cards. Assume that Larkspur sells $5,700 of prepaid cards in January 2020. It then pays TeleExpress based on usage, which turns out to be 50% in February, 30% in March, and 20% in April. The total payment by Larkspur for TeleExpress lines over the three months is $2,100. Indicate how much income Larkspur should recognize in January, February, March, and April under IFRS. (Do not leave any answer field blank. Enter O for amounts.) Month Income January $ February $ March 2$ April 2$Splish Company sells goods to Blossom Company during 2020. It offers Blossom the following rebates based on total sales to Blossom. If total sales to Blossom are 10,500 units, it will grant a rebate of 2%. If it sells up to 21,200 units, it will grant a rebate of 5%. If it sells up to 30,800 units, it will grant a rebate of 6%. In the first quarter of the year, Splish sells 10,600 units to Blossom at a sales price of $106,000. Splish, based on past experience, has sold over 37,600 units to Blossom, and these sales normally take place in the third quarter of the year.What amount of revenue should Splish report for the sale of the 10,600 units in the first quarter of the year. Revenue $Stellar Company offers a set of building blocks to customers who send in 3 UPC codes from Stellar cereal, along with 60¢. The block sets cost Stellar $0.90 each to purchase and 60¢ each to mail to customers. During 2025, Stellar sold 1,344,000 boxes of cereal. The company expects 30% of the UPC codes to be sent in. During 2025, 134,400 UPC codes were redeemed. Prepare Stellar's December 31, 2025, adjusting entry. (If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. List all debit entries before credit entries.) Account Titles and Explanation Debit
- Sheridan Candy Company offers a coffee mug as a premium for every ten $1 candy bar wrappers presented by customers together with $2. The purchase price of each mug to the company is $2.40; in addition it costs $1.60 to mail each mug. The results of the premium plan for the years 2020 and 2021 are as follows (assume all purchases and sales are for cash): Coffee mugs purchased Candy bars sold Wrappers redeemed 2020 wrappers expected to be redeemed in 2021 2021 wrappers expected to be redeemed in 2022 2020 2021 710,000 800,000 5,700,000 6,980,000 2,800,000 4.160,000 2,000,000 2,700,000Sycamore Candy offers an MP3 download (seven-single medley) as a premium for every five candy bar wrappers presented by customers together with $2.50. 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 $2.25. 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.) $1000 2020 $1000 2021 MP3 codes purchased 250,000 330,000 Candy bars sold 2,895,400 2,743,600 Wrappers redeemed 1,200,000 1,500,000 2020 wrappers expected to be redeemed in 2021 290,000 2021 wrappers expected to be redeemed in 2022 350,000 Instructions a. Prepare the journal entries that should be made in 2020 and 2021 to record the transactions related to the premium plan of the Sycamore Candy. b. Indicate the account names, amounts, and classifications of the items related to the premium…Godo
- Ayayai Inc. sells prepaid telephone cards to customers. Ayayai then pays the telecommunications company, TeleExpress, for the actual use of its telephone lines related to the prepaid telephone cards. Assume that Ayayai sells $4,100 of prepaid cards in January 2020. It then pays TeleExpress based on usage, which turns out to be 55% in February, 25% in March, and 20% in April. The total payment by Ayayai for TeleExpress lines over the 3 months is $3,000.Indicate how much income Ayayai should recognize in January, February, March, and April. (If answer is 0, please enter 0. Do not leave any fields blank.) January income February income March income April incomeOriole Frosted Flakes Company offers its customers a pottery cereal bowl if they send in 4 boxtops from Oriole Frosted Flakes boxes and $2. The company estimates that 60% of the boxtops will be redeemed. In 2021, the company sold 795000 boxes of Frosted Flakes and customers redeemed 356000 boxtops receiving 89000 bowls. If the bowls cost Oriole Company $4 each, how much liability for outstanding premiums should be recorded at the end of 2021?Moon Co. sells food blenders. During 2019, Moon made 37,000 blenders at an average cost of $80. It sold out 25,000 food blenders at an average price of $130. Moon provides a 2-year warranty for each blender sold and estimates 9% of blenders will be returned for warranty with an estimated cost of $36 each. By the end of 2019, Moon has spent $44,000 servicing the warranty repairs. All the above transactions have been settled in cash. During 2019, Moon has 50 employees who work 5-day per week and get paid each other Friday. Salaries of $324,000 and payroll expense of $37,000 have been paid until December 22. Since the business grows quickly, Moon needs cash to expand. By the end of 2018, the Board of Directors authorized the management to issue 10-year bonds with a par value of $3,000,000, annual contract interest rate of 8% and semi-annual interest payments. Moon chose to use the straight-line method to amortize discount or premium on its bonds. On January 1, 2019, management issued…
