Miracle Company manufactures a product that is packaged and sold. A plate is offered to customers sending in three wrappers accompanied by a remittance of P10. Data with respect to the premium offer are summarized below. 2020 2021 Sales 3,600,000 4,200,000 Purchase of premium, P50 per plate 390,000 580,000 Number of plates distributed as premiums 5,000 9,000 Estimated number of plates to be distributed in subsequent period 2,000 3,000 Distribution cost is P20 per plate Required: Prepare journal entries that would be made in 2020 and 2021 to record sales, premium purchases and redemptions, and year-end adjustments.

Miracle Company manufactures a product that is packaged and sold. A plate is offered to customers sending in three wrappers accompanied by a remittance of P10. Data with respect to the premium offer are summarized below. 2020 2021 Sales 3,600,000 4,200,000 Purchase of premium, P50 per plate 390,000 580,000 Number of plates distributed as premiums 5,000 9,000 Estimated number of plates to be distributed in subsequent period 2,000 3,000 Distribution cost is P20 per plate Required: Prepare journal entries that would be made in 2020 and 2021 to record sales, premium purchases and redemptions, and year-end adjustments.

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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Question

Miracle Company manufactures a product that is packaged and sold. A plate is offered to
customers sending in three wrappers accompanied by a remittance of P10.
Data with respect to the premium offer are summarized
below.
2020
2021
Sales
3,600,000
4,200,000
Purchase of premium, P50 per plate
390,000
580,000
Number of plates distributed as premiums
5,000
9,000
Estimated number of plates to be distributed in subsequent
period
2,000
3,000
Distribution cost is P20 per plate
Required:
Prepare journal entries that would be made in 2020 and 2021 to record sales, premium
purchases and redemptions, and year-end adjustments.

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