eto ABC Con coupo bag of dog TOod it sells. return for eight coupons, customers receive a leash. The leashes cost Deeto ABC P 3 each. Deeto ABC estimates that 40 percent of the coupons will be redeemed. Data for 2020 and 2021 are as follows 2020 2021 Bags of dog food sold Leashes purchased Coupons redeemed 500,000 600,000 18,000 22,000 120,000 150,000

eto ABC Con coupo bag of dog TOod it sells. return for eight coupons, customers receive a leash. The leashes cost Deeto ABC P 3 each. Deeto ABC estimates that 40 percent of the coupons will be redeemed. Data for 2020 and 2021 are as follows 2020 2021 Bags of dog food sold Leashes purchased Coupons redeemed 500,000 600,000 18,000 22,000 120,000 150,000

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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Muggs Co. includes one coupon in each bag of dog food it sells. In return for eight coupons, customers receive a leash. The leashes cost Muggs $4 each. Muggs estimates that 45 percent of the coupons will be redeemed. Data for 2025 and 2026 are as follows: 2025 2026 Bags of dog food sold 500,000 600,000 Leashes purchased 18,000 22,000 Coupons redeemed 120,000 150,000 The premium expense for 2025 is $250,000. $112,500. $100,000. O $60,000.
M includes one coupon in each bag of dog food it sells. The coupons do not have an expiration date. In exchange for five coupons, M sends customers a leash. The leashes cost M $2 each. M estimates customers will redeem 20% of the coupons. Data for 2018 and 2019 follows: 2018 2019 Bags of dog food sold 650,000 740,000 Leashes purchased 30,000 27,000 Coupons redeemed 100,000 120,000 What is M’s estimated coupon/leash premium expense for 2018? What is M’s estimated coupon/leash premium liability at December 31, 2018? What is M’s estimated coupon/leash premium expense for 2019? What is M’s…
Morrisons Supermarket includes one coupon in each bag of dog food it sells. In return for 4 coupons, customers receive a dog toy that the company purchases for $1.20 each. Morrisons's experience indicates that 60% of the coupons will be redeemed. During 2019, 100,000 bags of dog food were sold at $3.5 a bag, 12,000 toys were purchased, and 40,000 coupons were redeemed. Required: Prepare the journal entries that should be recorded in 2019 relative to the premium plan.
16. ABC Co. includes one coupon in each bag of dog food it sells. In return for eight coupons, plus P4, customers receive a leash. The leashes cost ABC P5.00 each and the cost for distribution it is P2 each. ABC estimates that 40 percent of the coupons will be redeemed. Data for 2022 and 2023, respectively, are as follows: Bags of dog food sold 500,000 600,000 Leashes purchased 18,000 22,000 Coupons redeemed 120,000 150,000 To record the redemption, which of the following can’t be found in the entry? a. Dr. Premium expense of 75,000 b. Dr. Premium Expense of 45,000 c. Dr. Cash of 30,000 net d. Cr. Leash Inventory of 75,000
Sunland 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): 2020 2021 Coffee mugs purchased 750,000 820,000 Candy bars sold 5,600,000 6,760,000 Wrappers redeemed 2,700,000 4,250,000 2020 wrappers expected to be redeemed in 2021 1,900,000 2021 wrappers expected to be redeemed in 2022 2,680,000 Part 1 Partially correct answer icon Your answer is partially correct. Prepare the general journal entries that should be made in 2020 and 2021 related to the above plan by Sunland Candy. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit…
Sunland 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): 2020 2021 Coffee mugs purchased 750,000 820,000 Candy bars sold 5,600,000 6,760,000 Wrappers redeemed 2,700,000 4,250,000 2020 wrappers expected to be redeemed in 2021 1,900,000 2021 wrappers expected to be redeemed in 2022 2,680,000 Part 1 Prepare the general journal entries that should be made in 2020 and 2021 related to the above plan by Sunland Candy. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit 2020 (To record…
Sterling Co. includes one coupon in each bag of dog food it sells. In return for 4 coupons, customers receive a dog toy that the company purchases for $1.50 each. Sterling's experience indicates that 60 percent of the coupons will be redeemed. In 2025, 150,000 bags of dog food were sold, 18,000 toys were purchased, and 60,000 coupons were redeemed. In 2026, 180,000 bags of dog food were sold, 24,000 toys were purchased, and 90,000 coupons were redeemed. Determine the premium expense to be reported in the income statement and the premium liability on the balance sheet for 2025 and 2026.
Las Piñas Company includes one coupon in each package of cereal it sells. A towel is offered as a premium to customers who send in 10 cuopons. Data for the premium offer are: 2018 2019 Packages of cereal sold 500,000 800,000 # of towels purchased at 40 per towel 30,000 60,000 # of towels distributed as premiums 20,000 50,000 # of towels to be distributed as premium Next period 5,000 3,000 In its 2019 income statement, what amount of premium expense should be reported?
Pine Company offers a coffee mug as a premium for every ten P2.50 candy bar wrappers presented by customers together with P10.00. The purchase price of each mug to the company is P8.00; in addition, it costs P5.00 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): 2020 2021 Coffee mugs purchased 480,000 400,000 Candy bars sold 3,750,000 4,500,000 Wrappers redeemed 1,900,000 2,800,000 2020 wrappers expected to be redeemed in 2021 1,300,000 2021 wrappers expected to be redeemed in 2022 1,800,000 What is the amount of premium liability in the December 31, 2021 balance sheet?
1. On January 1, 2024, Kent Co. introduced a premium program to stimulate sales. Kent includes one coupon in each bag of dog food it sells. In return for eight coupons plus $0.50, customers receive a leash. The leashes cost Kent $2.00 each. Kent estimates that 40 percent of the coupons will be redeemed. Kent's year-end is December 31. Data for 2024 and 2025 are as follows: Bags of dog food sold Leashes purchased Coupons redeemed 2024 700,000 29,000 220,000 Cr. Dr. Premium Expense Cr. Accrued Premium Liability a. What journal entry is needed to record premium expense for 2024 for the leashes? 2025 850,000 32,000 250,000 b. What journal entry is needed to record the coupons redeemed in 2024? Dr. Accrued Premium Liability Leash Inventory
Miracle Company manufactures a product that is packaged and sold. Each sale is accompanied by 3 coupons to be able to purchase a plate. A plate is offered to customers sending two coupons accompanied by a remittance of P2. 2018 2019 Sale @ 250 Purchase of premium, P10 per plate Number of plates distributed as premiums Premiums distributed Distribution cost P5 per plate QUESTIONS: 4,200,0003,600,000 580,000 390,000 80% 70% 17,000 13,000 1) What is the premium expense for 2018? 2) How much is the premium liability as of December 31, 2019?
Eres Hermoso Company includes one coupon in each box of laundry soap it sells. A towel is offered as a premium to customers who send in 10 coupons and a remittance of P20. 2022 2023 Boxes of soap sold 1,000,000 1,500,000 Number of towels purchased at P100 each 25,000 40,000 Coupons redeemed 200,000 350,000 The experience of the entity indicates that only 30% of the coupons will be redeemed. What is the estimated liability for premiums on December 31, 2023? Eres Hermoso Company includes one coupon in each box of laundry soap it sells. A towel is offered as a premium to customers who send in 10 coupons and a remittance of P20.…