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WET Company includes one coupon in each package of cereal it sells. A towel is offered as a premium to customers who send in 10 coupons. Data for the premium offer are:                                                                           2019                 2020 Packages of cereal sold                                   500,000              800,000 Number of towels purchased at P40 per towel 30,000             60,000 Number of towels distributed as premium        20,000            50,000 Number of towels to be distributed as premium next period                                                         5,000               3,000 In its 2020 statement of comprehensive income, WET Company should report premium expense of: a. P2,400,000 b. P2,000,000 c. P2,120,000 d. P1,920,000

WET Company includes one coupon in each package of cereal it sells. A towel is offered as a premium to customers who send in 10 coupons. Data for the premium offer are:                                                                           2019                 2020 Packages of cereal sold                                   500,000              800,000 Number of towels purchased at P40 per towel 30,000             60,000 Number of towels distributed as premium        20,000            50,000 Number of towels to be distributed as premium next period                                                         5,000               3,000 In its 2020 statement of comprehensive income, WET Company should report premium expense of: a. P2,400,000 b. P2,000,000 c. P2,120,000 d. P1,920,000

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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WET Company includes one coupon in each package of cereal it sells. A towel is offered as a premium to customers
who send in 10 coupons. Data for the premium offer are:

                                                                          2019                 2020
Packages of cereal sold                                   500,000              800,000
Number of towels purchased at P40 per towel 30,000             60,000
Number of towels distributed as premium        20,000            50,000
Number of towels to be distributed as premium
next period                                                         5,000               3,000
In its 2020 statement of comprehensive income, WET Company should report premium expense of:
a. P2,400,000 b. P2,000,000 c. P2,120,000 d. P1,920,000

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