Topsy Corporation started a promotional program. A towel is offered as a premium to customers who send in 10 box tops of facial soap returned and a remittance of ₱20. Distribution cost is ₱5 per towel. The entity estimated that only 60% of the box tops reaching the market will be redeemed. The entity provided the following information: 2019 2020 Facial Soap sales, P45 per unit 2,400,000 php 2,785,000 php Towel purchases, P70 per unit 320,500 php 355,000 php Number of box tops returned 20,500 php 34,850 php REQUIRED: Compute for the premium liability for the year ended December 31, 2019 and 2020.
Topsy Corporation started a promotional program. A towel is offered as a premium to customers who send in 10 box tops of facial soap returned and a remittance of ₱20. Distribution cost is ₱5 per towel. The entity estimated that only 60% of the box tops reaching the market will be redeemed. The entity provided the following information: 2019 2020 Facial Soap sales, P45 per unit 2,400,000 php 2,785,000 php Towel purchases, P70 per unit 320,500 php 355,000 php Number of box tops returned 20,500 php 34,850 php REQUIRED: Compute for the premium liability for the year ended December 31, 2019 and 2020.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Topsy Corporation started a promotional program. A towel is offered as a premium to customers who send in 10 box tops of facial soap returned and a remittance of ₱20. Distribution cost is ₱5 per towel. The entity
estimated that only 60% of the box tops reaching the market will be redeemed. The entity provided the following information:
| 2019 | 2020 | |
| Facial Soap sales, P45 per unit | 2,400,000 php | 2,785,000 php |
| Towel purchases, P70 per unit | 320,500 php | 355,000 php |
| Number of box tops returned | 20,500 php | 34,850 php |
REQUIRED: Compute for the premium liability for the year ended December 31, 2019 and 2020.
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