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Sanibel Mint Company

Sanibel Mint Company

FINANCIAL ACCOUNTING
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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P12.9B (LO 3,4) (Premium Entries and Financial Statement Presentation) Sanibel Mint Company offers one song download as a premium for every five candy mint UPC codes presented by customers together with $0.50. The candy mints are sold by the company to distributors for 20 cents each. The pur- chase price of each download to the company is $0.80. Upon receipt and verification, a music download code is emailed to the customer. The results of the premium plan for the years 2025 and 2026 are as follows: (All purchases and sales are for cash.) Download codes purchased Candy mints sold UPC codes redeemed 2025 UPC codes expected to be redeemed in 2026 2026 UPS codes expected to be redeemed in 2027 2025 600,000 6,200,500 1,600,000 620,000 2026 500,000 7,600,000 3,100,000 360,000 Instructions a. Prepare the journal entries that should be made in 2025 and 2026 to record the transactions related to the premium plan of the Sanibel Mint Company. b. Indicate the account names, amounts, and classifications of the items related to the premium plan that would appear on the balance sheet and the income statement at the end of 2025 and 2026.
Transcribed Image Text:P12.9B (LO 3,4) (Premium Entries and Financial Statement Presentation) Sanibel Mint Company offers one song download as a premium for every five candy mint UPC codes presented by customers together with $0.50. The candy mints are sold by the company to distributors for 20 cents each. The pur- chase price of each download to the company is $0.80. Upon receipt and verification, a music download code is emailed to the customer. The results of the premium plan for the years 2025 and 2026 are as follows: (All purchases and sales are for cash.) Download codes purchased Candy mints sold UPC codes redeemed 2025 UPC codes expected to be redeemed in 2026 2026 UPS codes expected to be redeemed in 2027 2025 600,000 6,200,500 1,600,000 620,000 2026 500,000 7,600,000 3,100,000 360,000 Instructions a. Prepare the journal entries that should be made in 2025 and 2026 to record the transactions related to the premium plan of the Sanibel Mint Company. b. Indicate the account names, amounts, and classifications of the items related to the premium plan that would appear on the balance sheet and the income statement at the end of 2025 and 2026.
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