Please solve this problem general Accounting question Premium Electronics sold 600,000 smart watches during 2012 under apromotional program. Each watch included one coupon redeemablefor a $10 cash rebate. Premium estimates that 75% of the coupons willbe redeemed, although only 280,000 coupons were processed during2012. Calculate the liability for unredeemed coupons that PremiumElectronics should report as of December 31, 2012.

Step 1: Define Coupon LiabilityA coupon liability represents the estimated future obligation for…

Answered: Premium Electronics sold 600,000 smart…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter7: Budgeting

Section: Chapter Questions

Problem 11EB: Gear Up Co. pays 65% of its purchases in the month of purchase, 30% in the month after the purchase,...

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During 2020, Gray Company sold 500,000 boxes of cake mix under a new sales promotional program. Each box contained one coupon, which entitled the customer to a baking pan upon remittance of P40. The entity paid P50 per pan and P5 for handling and shipping. The entity estimated that 80% of the coupons will be redeemed, even though only 300,000 coupons had been processed during 2020. 2a. What amount should be reported as premium expense for 2020? a. P 2,000,000 b. P 4,500,000 c. P 6,000,000 d. P 7,500,000 2b. What amount should be reported as liability for unredeemed coupons on December 31, 2020? a. 1,000,000 b. 1,500,000 c. 3,000,000 d. 5,000,000
During 2020, Day Company sold 500,000 boxes of cake mix under a new sales promotional program. Each box contained one coupon, which entitled the customer to a baking pan upon remittance of P40. The entity paid P50 per pan and P5 for handling and shipping. The entity estimated that 80% of the coupons will be redeemed, even though only P300,000 coupons had been processed during 2020. 1. What amount should be reported as premium expense for P2020? 2. What amount should be reported as liability for unredeemed coupons on December 31, 2020?
Dairy, Inc. offered an ice cream scoop in exchange for 8 labels of ice cream and $3.00. The ice cream scoops cost $7.00 each. Experience indicates that 45% of the coupons will be redeemed. Customers can redeem the coupons, receipts and cash through February 28, 2021. Dairy, Inc. sold 40,000 gallons of ice cream. 15,000 of the coupons were redeemed in 2020. What is the amount of premium expense to be recognized on the income statement for the year ended 2020? If all of the remaining ice cream scoops were issued in 2021, what is the amount of the premium expense to be recognized in 2021? What is the amount of the premium liability as of 12/31/20? Please provide a detailed explanation.
Lastly, can you show me how to do this one? 22. In 2018, XYZ, Inc. sold 2,000 beds for $50 each. The beds carry a 2-year warranty for repairs. XYZ estimates that repair costs will average 3% of the total selling price. What amount would be recorded in the warranty liability account as a result of selling the beds during 2018? Assets = Liabilities + Stockholders’ Equity Revenues – Expenses = Net Income
In 2021, Holyoak Inc. offers a coupon for $20 off qualifying purchases of its new line of products. Holyoak sold 10,200 of these products during the year. By year-end of 2021, 7,300 coupons had been redeemed and the $20 reduction of purchase price provided to customers. Holyoak's historical experience with such coupons indicates that 85% of customers use the coupon. Holyoak recognizes coupon expense in the period coupons are issued. What is the coupon promotion liability that Holyoak should report in its December 31, 2021, balance sheet? Multiple Choice O O O $20,400. $27,400. $17,200, $19,340.
Sweet Dates Company offers a premium to its customers—a glass bowl (cost to Sweet Dates is $0.90) upon return of 40 coupons. Two coupons are placed in each box of dates sold. The company estimates, on the basis of past experience, that only 70% of the coupons will ever be redeemed. During 2019, 10 million boxes of dates are sold at $0.30 each. Eight million coupons are redeemed during 2019. Sweet Dates purchased 360,000 glass bowls for the plan on January 1, 2019. Required: 1. Prepare the journal entries related to the sale of dates and the premium plan in 2019. 2. Show how the preceding items would be reported on the December 31, 2019, balance sheet.
On September 1, 2022, Darren Co. borrowed P150,000 from BPI by issuing 8% note due August 31, 2023, for the same amount. Darren Co. pledged all of its P200,000 accounts receivable as security. How much interest should be recognized on December 31, 2022?
A company offers a cash rebate of P1 on each P4 package of light bulbs sold since 2015. Historically, 10% of customers mail in the rebate form. During 2020, 5,000,000 packages of light bulbs are sold, and 150,000 P1 rebates are mailed to customers. What is the rebate liability to be shown on the 2020 financial statements dated December 31?
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abc company offers a cash rebate of P1 on each P4 package of light bulbs sold during 2022. Historically, 10% of customers mail in the rebate form. During 2022, 4,000,000 packages of light bulbs are sold, and 140,000 P1 rebates are mailed to customers. What is the rebate expense and liability, respectively, shown on the 2022 financial statements dated December 31? P140,000; P260,000 P100,000; P40,000 P400,000; P260,000 P260,000; P260,000
In December 2021, Texan Company began including one coupon in each package of candy that it sells and offering a toy in exchange for 50 centavos and five coupons. The toys cost Texan 80 centavos each. Eventually 60% of the coupons will be redeemed. During December, Texan sold 110,000 packages of candy and no coupons were redeemed. In its December 31, 2021, balance sheet, what amount should Texan report as estimated liability for coupons?
On April 1, 2017, Indigo Company assigns $549,400 of its accounts receivable to the Third National Bank as collateral for a $301,600 loan due July 1, 2017. The assignment agreement calls for Indigo to continue to collect the receivables. Third National Bank assesses a finance charge of 3% of the accounts receivable, and interest on the loan is 10% (a realistic rate of interest for a note of this type). Your answer is partially correct. Try again. Prepare the April 1, 2017, journal entry for Indigo Company. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Apr. 1, 2017 SHOW LIST OF ACCOUNTS LINK TO TEXT…

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