Magtatagumpay Company inaugurated a promotional campaign on January 2, 2029 to promote the salability of their product, Ghost Cereals. Magtatagumpay placed a coupon redeemable for a premium in each package of cereal sold at P200. Each premium, a limited edition water bottle cooling device, costs P25 and 10 coupons must be presented by a customer to receive a premium. Magtatagumpay estimated that only 70% of the coupons issued would be redeemed. For the 6 months ended July 31, 2019, the following transactions occurred: Packages of cereal sold 120,000 Premium purchased 30,000 Coupons redeemed 54,000 How much should be reported as premium expense for coupons on the fiscal year ended July 31, 2029?
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Magtatagumpay Company inaugurated a promotional campaign on January 2, 2029 to promote the salability of their product, Ghost Cereals. Magtatagumpay placed a coupon redeemable for a premium in each package of cereal sold at P200. Each premium, a limited edition water bottle cooling device, costs P25 and 10 coupons must be presented by a customer to receive a premium. Magtatagumpay estimated that only 70% of the coupons issued would be redeemed. For the 6 months ended July 31, 2019, the following transactions occurred:
Packages of cereal sold 120,000
Premium purchased 30,000
Coupons redeemed 54,000
How much should be reported as premium expense for coupons on the fiscal year ended July 31, 2029?
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