I want the correct answer is accounting During the year, SportsFit Apparel sold 900,000 athletic shirts under apromotional campaign. Each shirt included one coupon for a $5.50 cashrebate. SportsFit estimates that 80% of the coupons will be redeemed,although only 425,000 coupons had been processed during the year. AtDecember 31, SportsFit should report a liability for unredeemed coupons of:A. $2,090,000B. $3,960,000C. $4,950,000D. $1,622,500

Step 1: Definition of Coupon LiabilityA coupon liability represents the estimated future obligation…

Answered: During the year, SportsFit Apparel sold…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

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Chapter7: Budgeting

Section: Chapter Questions

Problem 11EB: Gear Up Co. pays 65% of its purchases in the month of purchase, 30% in the month after the purchase,...

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During 2020, Gray Company sold 500,000 boxes of cake mix under a new sales promotional program. Each box contained one coupon, which entitled the customer to a baking pan upon remittance of P40. The entity paid P50 per pan and P5 for handling and shipping. The entity estimated that 80% of the coupons will be redeemed, even though only 300,000 coupons had been processed during 2020. 2a. What amount should be reported as premium expense for 2020? a. P 2,000,000 b. P 4,500,000 c. P 6,000,000 d. P 7,500,000 2b. What amount should be reported as liability for unredeemed coupons on December 31, 2020? a. 1,000,000 b. 1,500,000 c. 3,000,000 d. 5,000,000
In 2021, Holyoak Inc. offers a coupon for $20 off qualifying purchases of its new line of products. Holyoak sold 10,200 of these products during the year. By year-end of 2021, 7,300 coupons had been redeemed and the $20 reduction of purchase price provided to customers. Holyoak's historical experience with such coupons indicates that 85% of customers use the coupon. Holyoak recognizes coupon expense in the period coupons are issued. What is the coupon promotion liability that Holyoak should report in its December 31, 2021, balance sheet? Multiple Choice O O O $20,400. $27,400. $17,200, $19,340.
During 2020, Day Company sold 500,000 boxes of cake mix under a new sales promotional program. Each box contained one coupon, which entitled the customer to a baking pan upon remittance of P40. The entity paid P50 per pan and P5 for handling and shipping. The entity estimated that 80% of the coupons will be redeemed, even though only P300,000 coupons had been processed during 2020. 1. What amount should be reported as premium expense for P2020? 2. What amount should be reported as liability for unredeemed coupons on December 31, 2020?
Pepper, Inc. had the following receivable financing transactions in 2021:a) At the beginning of November, Pepper, Inc. assigned P2,000,000 out of its P10,000,000 outstanding accounts receivables to Metrobank in consideration of a P1,500,000, 12% loan. Metrobank charged the company 5% of the loan principal as service charge. By the end of November, Pepper collected P600,000 cash from the assigned accounts net of a P50,000 sales discount. Also, by the end of November, Pepper accepted from customers merchandise originally invoiced at P60,000 as returns.By the end of December, Pepper collected another P700,000 from the assigned accounts after P40,000 sales discount. The company wrote-off P80,000 of the assigned accounts as worthless.The agreement with Metrobank calls for monthly remittance of customer collections for the month. The collections will cover both interest and loan principal.b) Also, at the beginning of November, Pepper, Inc. factored another P500,000 of its accounts…
At December 31, 2020, Feel Company had 20,000 gift certificates outstanding, which had been sold to customers during 2020 for P500 each. Feel operates on a gross margin of 60% of its sales. What amount of revenue pertaining to the 20,000 gift certificates should be deferred at December 31, 2020? *
Calm Co. provides warranty for its products. Experience shows that 10% of products sold require warranty repairs and that 70% of the warranty costs are expended in the year of sale and 30% in the following year. Half of the defective products require minor repairs that cost 20% of the sale price, while the other half require major repairs that cost 70% of the sale price. A 3% risk adjustment factor is considered appropriate to reflect the uncertainties in the cash flow estimates. Sales of 4,000,000 were made evenly throughout 20x1. The outflow for repairs in 20x2 (for the products sold in 20x1) are expected to take place on June 30, 20x2. The appropriate discount factor is 0.95238. How much is the warranty provision at December 31, 20x1. 264,857 176,571 105,943 52,971
Grouper Ltd. manufactures a line of amplifiers that carry a three-year warranty against defects. Based on experience, the estimated warranty costs related to dollar sales are as follows: first year after sale-3% of sales; second year after sale-4% of sales; and third year after sale-5% of sales. Sales and actual warranty expenditures for the first three years of business were: Sales Warranty Expenditures 2021 $870,000 $17,100 2022 1,010,000 48,400 2023 1,041,000 80,000 (a) Calculate the amount that Grouper should report as warranty expense on its 2023 income statement and as a warranty liability on its December 31, 2023 SFP using the assurance-type warranty (expense-based approach). Assume that all sales are made evenly throughout each year and that warranty expenditures are also evenly spaced according to the rates above. Warranty expense $ Warranty liability $
38. In 2021, Davidson Inc. offers a coupon for $20 off qualifying purchases of its new line of products. Davidson sold 10,000 of these products during the year. By year-end of 2021, 7,100 coupons had been redeemed and the $20 reduction of purchase price provided to customers. Davidson's historical experience with such coupons indicates that 85% of customers use the coupon. Davidson recognizes coupon expense in the period coupons are issued. What is the coupon promotion liability that Davidson should report in its December 31, 2021, balance sheet? A. $28,000. B. $20,000. C. $18,000. D. $19,000.
GoodBuy sells gift cards redeemable for GoodBuy products either in store or online. During 2024, GoodBuy sold $1,040,000 of gift cards, and $900,000 of the gift cards were redeemed for products. As of December 31, 2024, $33,000 of the remaining gift cards had passed the date at which GoodBuy concludes that the cards will never be redeemed. How much gift card revenue should GoodBuy recognize in 2024?
Gear Up Co. pays 65% of its purchases in the month of purchase, 30% in the month after the purchase, and 5% in the second month following the purchase. What are the cash payments if it made the following purchases in 2018?
On December 1 of the current year, Jordan Inc. assigns 125,000 of its accounts receivable to McLaughlin Company for cash. McLaughlin Company charges a 750 service fee, advances 85% of Jordans accounts receivable, and charges an annual interest rate of 9% on any outstanding loan balance. Prepare the related journal entries for Jordan.
In packages of its products, Yolo Company includes coupons that may be presented at retail stores to obtain discounts on other Yolo Company products. Retailers are reimbursed for the face amount of coupons plus 20% of that amount for handling costs.Yolo honors requests for coupon redemption by retailers up to three months after the consumer expiration date. Yolo estimatesthat 80% of all coupons issued will ultimately be redeemed. Information relating to coupons issued by Yolo during 2019 is asfollows:Consumer expiration date December 31, 2019Total face amount of coupons issued P7,500,000Total payments to retailers as of December 31, 2019 P5,400,000What amount should Yolo report as a liability for unredeemed coupons at December 31, 2019?

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