Pine Company offers a coffee mug as a premium for every ten P2.50 candy bar wrappers presented by customers together with P10.00. The purchase price of each mug to the company is P8.00; in addition, it costs P5.00 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): 2020 2021 Coffee mugs purchased 480,000 400,000 Candy bars sold 3,750,000 4,500,000 Wrappers redeemed 1,900,000 2,800,000 2020 wrappers expected to be redeemed in 2021 1,300,000 2021 wrappers expected to be redeemed in 2022 1,800,000 What is the amount of premium liability in the December 31, 2021 balance sheet?
Pine Company offers a coffee mug as a premium for every ten P2.50 candy bar wrappers presented by customers together with P10.00. The purchase price of each mug to the company is P8.00; in addition, it costs P5.00 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): 2020 2021 Coffee mugs purchased 480,000 400,000 Candy bars sold 3,750,000 4,500,000 Wrappers redeemed 1,900,000 2,800,000 2020 wrappers expected to be redeemed in 2021 1,300,000 2021 wrappers expected to be redeemed in 2022 1,800,000 What is the amount of premium liability in the December 31, 2021 balance sheet?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Pine Company offers a coffee mug as a premium for every ten P2.50 candy bar wrappers presented by customers together with P10.00. The purchase price of each mug to the company is P8.00; in addition, it costs P5.00 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):
|
|
2020 |
2021 |
|
Coffee mugs purchased |
480,000 |
400,000 |
|
Candy bars sold |
3,750,000 |
4,500,000 |
|
Wrappers redeemed |
1,900,000 |
2,800,000 |
|
2020 wrappers expected to be redeemed in 2021 |
1,300,000 |
|
|
2021 wrappers expected to be redeemed in 2022 |
|
1,800,000 |
What is the amount of premium liability in the December 31, 2021 balance sheet?
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