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coupon in each package of cereal sold. A towel was offered as a premium to customers who send in 10 coupons. 2020 2021 Packages of cereal sold Number of towels purchased at P40 per towel 30,000 Number of towels distributed as premium Number of towels to be distributed as premium next period 800,000 60,000 50,000 500,000 20,000 5,000 3,000 1. What is the premium expense for 2020? a. 1,000,000 b. 1,200,000 600,000 d. 500,000 C. 2. What is the premium liability on December 31, 2020? a. 400,000 b. 200,000 c. 600,000 d. 300,000

coupon in each package of cereal sold. A towel was offered as a premium to customers who send in 10 coupons. 2020 2021 Packages of cereal sold Number of towels purchased at P40 per towel 30,000 Number of towels distributed as premium Number of towels to be distributed as premium next period 800,000 60,000 50,000 500,000 20,000 5,000 3,000 1. What is the premium expense for 2020? a. 1,000,000 b. 1,200,000 600,000 d. 500,000 C. 2. What is the premium liability on December 31, 2020? a. 400,000 b. 200,000 c. 600,000 d. 300,000

FINANCIAL ACCOUNTING
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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Problem 2-16 (IAA) Love Company included one coupon in each package of cereal sold. A towel was offered as a premium to customers who send in 10 coupons. 2020 2021 Packages of cereal sold Number of towels purchased at P40 per towel 30,000 Number of towels distributed as premium Number of towels to be distributed as premium next period 800,000 60,000 50,000 500,000 20,000 5,000 3,000 1. What is the premium expense for 2020? a. 1,000,000 b. 1,200,000 c. 600,000 d. 500,000 2. What is the premium liability on December 31, 2020? a. 400,000 b. 200,000 c. 600,000 d. 300,000
Transcribed Image Text:Problem 2-16 (IAA) Love Company included one coupon in each package of cereal sold. A towel was offered as a premium to customers who send in 10 coupons. 2020 2021 Packages of cereal sold Number of towels purchased at P40 per towel 30,000 Number of towels distributed as premium Number of towels to be distributed as premium next period 800,000 60,000 50,000 500,000 20,000 5,000 3,000 1. What is the premium expense for 2020? a. 1,000,000 b. 1,200,000 c. 600,000 d. 500,000 2. What is the premium liability on December 31, 2020? a. 400,000 b. 200,000 c. 600,000 d. 300,000
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