fro every 10 bottle caps and P5 turned in customers receive an attractive ballpen and become eligible for the grand prize of P5,000 in cash awarded for every 100 tops turned in. the entity estimated that only 25% of bottle caps reaching the hands of customers will be presented for redemption. during the current year, the entity sold 400,000 bottles of banana juice at P9 each, purchased P10,000 ball point pens for a total cost of P900,000 and incurred nondeferrable costs of P
fro every 10 bottle caps and P5 turned in customers receive an attractive ballpen and become eligible for the grand prize of P5,000 in cash awarded for every 100 tops turned in. the entity estimated that only 25% of bottle caps reaching the hands of customers will be presented for redemption. during the current year, the entity sold 400,000 bottles of banana juice at P9 each, purchased P10,000 ball point pens for a total cost of P900,000 and incurred nondeferrable costs of P
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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pop company sells banana juice in order to promote the drink the entity inaugurated in the current year a premium plan called drink -n-win fro every 10 bottle caps and P5 turned in customers receive an attractive ballpen and become eligible for the grand prize of P5,000 in cash awarded for every 100 tops turned in. the entity estimated that only 25% of bottle caps reaching the hands of customers will be presented for redemption. during the current year, the entity sold 400,000 bottles of banana juice at P9 each, purchased P10,000 ball point pens for a total cost of P900,000 and incurred nondeferrable costs of P20,000 applicable to the premium plan. a total of 8,000 pens have been redeemed and thirty grand prizes have been awarded.
required
prepare journal entries to record the transaction relating to the premium plan for the current year
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