Higgins Candy Company offers a coffee mug as a premium for every ten $1 candy bar wrappers presented bycustomers together with $2. The purchase price of each mug to the company is $2.40; in addition it costs $1.60 to maileach mug. The results of the premium plan for the years 2020 and 2021 are as follows (assume all purchases and salesare for cash):Coffee mugs purchasedCandy bars soldWrappers redeemed2020 wrappers expected to be redeemed in 20212021 wrappers expected to be redeemed in 2022Instructions2020720,0005,600,0002.800.0002,000,0002021800,0006,750,0004,200,0002.700,000(a) Prepare the general journal entries that should be made in 2020 and 2021 related to the above plan by HigginsCandy.(b) Indicate the account names, amounts, and classifications of the items related to the premium plan that woappear on the Higgins Candy Company balance sheet and income statement at the end of 2020 and 2021.

Journal entry records the accounting transactions of a business in a journal book. All the business…

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):

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):

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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