SweetCandy offers an MP3 download (seven-single medley) as a premium for every five candy bar wrappers presented by customers together with P2.50. The candy bars are sold by the company to distributors for 30 pence each. The purchase price of each download code to the company is P2.25. In addition, it costs P0.50 to distribute each code. The results of the premium plan for the years 2019 and 2020 are as follows. (All purchases and sales are for cash.) 2019 2020 MP3 codes purchased 250,000 330,000 Candy bars sold 2,895,400 2,743,600 Wrappers redeemed 1,200,000 1,500,000 2019 wrappers expected to be redeemed in 2020 290,000 2020 wrappers expected to be redeemed in 2021 350,000 Instructions Prepare the journal entries that should be made in 2019 and 2020 to record the transactions related to the premium plan of the SweetCandy.
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
I. SweetCandy offers an MP3 download (seven-single medley) as a premium for every five candy bar wrappers presented by customers together with P2.50. The candy bars are sold by the company to distributors for 30 pence each. The purchase price of each download code to the company is P2.25. In addition, it costs P0.50 to distribute each code. The results of the premium plan for the years 2019 and 2020 are as follows. (All purchases and sales are for cash.)
|
2019 |
2020 |
|
|
MP3 codes purchased |
250,000 |
330,000 |
|
Candy bars sold |
2,895,400 |
2,743,600 |
|
Wrappers redeemed |
1,200,000 |
1,500,000 |
|
2019 wrappers expected to be redeemed in 2020 |
290,000 |
|
|
2020 wrappers expected to be redeemed in 2021 |
350,000 |
Instructions
Prepare the
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