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 45percent of the coupons will be redeemed. Data for 2025 and 2026 are as follows:20252026Bags of dog food sold500,000600,000Leashes purchased18,00022,000Coupons redeemed120,000150,000The premium expense for 2025 is$250,000.$112,500.$100,000.O $60,000.

The expenses that are related to current year sales are recognised during current year and recorded…

Answered: Muggs Co. includes one coupon in each…

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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Pharoah sells 100 nonrefundable $50 gift cards for 3D printer paper on February 28, 2020. The paper has a standalone selling price of $50 (cost $36). The gift cards expiration date is June 30, 2020. Pharoah estimates that customers will not redeem 10% of these gift cards. The pattern of redemption is as follows. Redemption Total March 31 30 % April 30 75 June 30 90
Sheffield Corp. includes one coupon in each bag of dog food it sells. In return for eight coupons, customers receive a leash. The leashes cost Sheffield $5 each. Sheffield 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 520000 620000 Leashes purchased 19000 21000 Coupons redeemed 130000 130000 The premium liability at December 31, 2020 is O S73750. O $48750. O $63750. O $85750.
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Dream Big Pillow Co., pays 65% of its purchases in the month of purchase, 30% the month after the purchase, and 5% in the second month following the purchase. It made the following purchases at the end of 2017 and the beginning of 2018: Nov. 2017 Dec. 2017 Jan. 2018 Feb. 2018 Mar. 2018 $58,000 $48,000 $33,000 $39,000 $45,000 Given the above purchases, how much cash will be paid in quarter 2018? Cash paid $
1. ProWasher began production of a new dishwasher in June 2023, and by December 31, 2023 had sold 100,000 units to various retailers for $500 each. Each dishwasher is sold with a one-year warranty included. The company estimates that its warranty expense per dishwasher will amount to $25. Warranties similar to these are available for sale for $75. By year end, the company had already paid out $1 million in warranty expenditures on 35,000 units. ProWasher’s records currently show a warranty expense of $1 million for 2023. 2. ProWasher’s retail division rents space from Park Malls. ProWasher pays a rental fee of $6,000 per month plus 5% on the amount of yearly profits that is over $500,000. ProWasher’s CEO, Burt D. Washer, tells you that he had instructed the previous accountant to increase the estimate of bad debts expense and several other estimates in order to keep the retail division’s profits at $475,000. 3. ProWasher’s lawyer, Anna Turney, informed you that ProWasher has a…
Cullumber Music Shop gives its customers coupons redeemable for a poster plus a Bo Diddley CD. One coupon is issued for each dollar of sales. On the surrender of 100 coupons and $6.00 cash, the poster and CD are given to the customer. It is estimated that 80 of the coupons will be presented for redemption. Sales for the first period were $770,000, and the coupons redeemed totaled 425,000. Sales for the second period were $870,000, and the coupons redeemed totaled 740,000. Cullumber Music Shop bought 20,000 posters at $2.50/poster and 20,000 CDs at $7.50/CD. Prepare the following entries for the two periods, assuming all the coupons expected to be redeemed from the first period were redeemed by the end of the second period. (a) To record coupons redeemed. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entries before credit…

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