Yummy Candy Company offers a coffee mug as a premium for every ten 50-centavo candy bar wrappers presented by customers together with P1.00. The purchase price of each mug to the company is P0.90; in addition it costs P0.60 to mail each mug. The results of the premium plan for the years 2004 and 2005 are as follows (assume all purchases and sales are for cash): 2004 2005 Coffee mugs purchased Candy bars sold Wrappers redeemed 2004 wrappers expected to be redeemed in 2005 2,600,000 2005 wrappers expected to be redeemed in 2006 960,000 800,000 7,500,000 9,000,000 3,800,000 5,600,000 3,600,000 Requirements: a. Prepare the journal entries that should be made in 2004 and 2005 related to the above plan by Yummy Candy.
Yummy Candy Company offers a coffee mug as a premium for every ten 50-centavo candy bar wrappers presented by customers together with P1.00. The purchase price of each mug to the company is P0.90; in addition it costs P0.60 to mail each mug. The results of the premium plan for the years 2004 and 2005 are as follows (assume all purchases and sales are for cash): 2004 2005 Coffee mugs purchased Candy bars sold Wrappers redeemed 2004 wrappers expected to be redeemed in 2005 2,600,000 2005 wrappers expected to be redeemed in 2006 960,000 800,000 7,500,000 9,000,000 3,800,000 5,600,000 3,600,000 Requirements: a. Prepare the journal entries that should be made in 2004 and 2005 related to the above plan by Yummy Candy.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:Yummy Candy Company offers a coffee mug as a premium for every ten
50-centavo candy bar wrappers presented by customers together with
P1.00. The purchase price of each mug to the company is P0.90; in
addition it costs P0.60 to mail each mug. The results of the premium plan
for the years 2004 and 2005 are as follows (assume all purchases and
sales are for cash):
2004
2005
Coffee mugs purchased
Candy bars sold
Wrappers redeemed
2004 wrappers expected to be redeemed in 2005 2,600,000
2005 wrappers expected to be redeemed in 2006
960,000
800,000
7,500,000
9,000,000
3,800,000
5,600,000
3,600,000
Requirements:
a. Prepare the journal entries that should be made in 2004 and 2005
related to the above plan by Yummy Candy.
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