PROBLEM 2 During 2020, ABC Co. sold 100,000 boxes of cake mix under a new sales promotional program. Each box contains one coupon. These coupons entitle the customer to a baking pan upon remittance of ten coupons and P350. The entity pays P500 per pan and P25 for handling and shipping. The entity estimated that 80% of the coupons will be redeemed even though only 50,000 coupons had been presented during 2020. Compute for the estimated liability on December 31, 2020
PROBLEM 2 During 2020, ABC Co. sold 100,000 boxes of cake mix under a new sales promotional program. Each box contains one coupon. These coupons entitle the customer to a baking pan upon remittance of ten coupons and P350. The entity pays P500 per pan and P25 for handling and shipping. The entity estimated that 80% of the coupons will be redeemed even though only 50,000 coupons had been presented during 2020. Compute for the estimated liability on December 31, 2020
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter9: Current Liabilities And Contingent Obligations
Section: Chapter Questions
Problem 19E
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![PROBLEM 2
During 2020, ABC Co. sold 100,000 boxes of cake mix under a new sales promotional program. Each box
contains one coupon. These coupons entitle the customer to a baking pan upon remittance of ten coupons
and P350. The entity pays P500 per pan and P25 for handling and shipping. The entity estimated that 80%
of the coupons will be redeemed even though only 50,000 coupons had been presented during 2020.
Compute for the estimated liability on December 31, 2020](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F925dba2e-5496-4bec-824d-e314c61db5bd%2Fb9e565dc-ef92-4fbb-a7eb-4abe8bc1ac8f%2Fpkvloch_processed.png&w=3840&q=75)
Transcribed Image Text:PROBLEM 2
During 2020, ABC Co. sold 100,000 boxes of cake mix under a new sales promotional program. Each box
contains one coupon. These coupons entitle the customer to a baking pan upon remittance of ten coupons
and P350. The entity pays P500 per pan and P25 for handling and shipping. The entity estimated that 80%
of the coupons will be redeemed even though only 50,000 coupons had been presented during 2020.
Compute for the estimated liability on December 31, 2020
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