Sydney Company is a retailer that sells clothing. The entity has launched a promotional campaign wherein if customers buy clothing with a single purchase of at least P12,000, the entity shall issue "30% discount coupons" on selected items for 2 months following the campaign. During the campaign, the entity sold clothing worth P3,240,000 and had issued 100 "30% discount coupons". It is expected that 80% of the coupons will be redeemed and customers using the coupons will buy clothing at an average price of P15,000. Required: 1. Compute the stand-alone selling price of the discount coupons. 2. Allocate the transaction price to the products sold and the discount coupons. 3. Prepare journal entries for the current year including the redemption of the coupons.

Sydney Company is a retailer that sells clothing. The entity has launched a promotional campaign wherein if customers buy clothing with a single purchase of at least P12,000, the entity shall issue "30% discount coupons" on selected items for 2 months following the campaign. During the campaign, the entity sold clothing worth P3,240,000 and had issued 100 "30% discount coupons". It is expected that 80% of the coupons will be redeemed and customers using the coupons will buy clothing at an average price of P15,000. Required: 1. Compute the stand-alone selling price of the discount coupons. 2. Allocate the transaction price to the products sold and the discount coupons. 3. Prepare journal entries for the current year including the redemption of the coupons.

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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Account Titles and Explanation Debit Credit (To record the pemium inventory) (To record the sales) (To record the expense associated with the sale) (To record the premium liability)