A.P75,000 and P 75,000B.P 135,000 and P 135,000C.P 210, 000 and P 75,000D.P 135,000 and P 210,000 Lance co inaugurated a promotional campaign on January 2, 2019 to promote thestability of their product. Lance Company placed a coupon redeemable for apremium in each package of cereal sold at P 200 Each premium costs P 25 and a 10coupons must be presented by a customer to receive a premium. Lance estimatedthat only 70% of the coupons issued would be redeemed. For the 6 months endedJuly 31, 2019, the following transactions occurred:Packages of Cereal sold120,00030,00d54,000Premium PurchasedCoupons redeemedHow much should be reported as premium expense and estimated liability forcoupons on the fiscal year ended July 31, 2019, respectively?

Lance Co has estimated Premium expenses at 70% of Sales. 10 coupons of are given to the customer ,…

Answered: nce Company placed a coupon re- cereal…

nce Company placed a coupon re- cereal sold at P 200 Each premiu by a customer to receive a premi s issued would be redeemed. For

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

A.P75,000 and P 75,000

B.P 135,000 and P 135,000

C.P 210, 000 and P 75,000

D.P 135,000 and P 210,000

Lance co inaugurated a promotional campaign on January 2, 2019 to promote the
stability of their product. Lance Company placed a coupon redeemable for a
premium in each package of cereal sold at P 200 Each premium costs P 25 and a 10
coupons must be presented by a customer to receive a premium. Lance 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
30,00d
54,000
Premium Purchased
Coupons redeemed
How much should be reported as premium expense and estimated liability for
coupons on the fiscal year ended July 31, 2019, respectively?

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