Prepare the journal entry to record the redemption by 9,600 customers. (Credit account titles are automatically indented wh 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.) Account Titles and Explanation Cash Premium Expense Inventory of Premiums Debit Account Titles and Explanation Premium Expense Estimated Liability for Premiums 7200 Debit 600 Prepare the journal entry to record the year-end accrual entry for estimated premium expense. (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.) Credit 52800 7800 Credit 52800
Prepare the journal entry to record the redemption by 9,600 customers. (Credit account titles are automatically indented wh 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.) Account Titles and Explanation Cash Premium Expense Inventory of Premiums Debit Account Titles and Explanation Premium Expense Estimated Liability for Premiums 7200 Debit 600 Prepare the journal entry to record the year-end accrual entry for estimated premium expense. (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.) Credit 52800 7800 Credit 52800
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
Question
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Transcribed Image Text:Prepare the journal entry to record the redemption by 9,600 customers. (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.)
Account Titles and Explanation
Cash
Premium Expense
Inventory of Premiums
Account Titles and Explanation
Premium Expense
Debit
Estimated Liability for Premiums
7200
Debit
600
Prepare the journal entry to record the year-end accrual entry for estimated premium expense. (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.)
Credit
52800
7800
Credit
52800
Transcribed Image Text:Cheyenne Corporation sold Sugar Frosted Cocoa Bombs, a children's breakfast cereal. As a promotion, Cheyenne offered its
customers a free music CD in exchange for 4 boxtops, plus $3.00 to cover postage and handling. The CD cost Cheyenne $3.25, and
postage costs to mail the CDs out to customers were $2.50. Cheyenne estimated that 80% of its customers would redeem boxtops.
Cheyenne purchased 10,600 CDs at the start of the promotion in November, 2020. 128,000 boxes of cereal were sold during
November and December, 2020, and Cheyenne's year-end was December 31. Prior to the end of the fiscal year, 9,600 customers
took advantage of the offer, which continued until February, 2021. Cheyenne follows ASPE and uses the expense approach to
account for its premiums.
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