Yummy Candy Company offers a coffee mug as a premium for every ten50-centavo candy bar wrappers presented by customers together withP1.00. The purchase price of each mug to the company is P0.90; inaddition it costs P0.60 to mail each mug. The results of the premium planfor the years 2004 and 2005 are as follows (assume all purchases andsales are for cash):2004960,0007,500,0002005Coffee mugs purchased800,000Candy bars soldWrappers redeemed2004 wrappers expected to be redeemed in 2005 2,62005 wrappers expected to be redeemed in 20069,000,0003,800,0005,600,0003,600,000Requirements:a. Compute for the premium expenses in 2004 and 2005, respectively.Assume expectations coincide with actual results.b. Compute for the liabilities for premium as of December 31, 2004 andDecember 31, 2005, respectively.

a) Premium Expense for 2004 = (3,800,000+2,600,000)/10 x (P 0.90+P 0.60- P1.00) = P 320,000 Premium…

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 960,000 2005 800,000 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 7,500,000 9,000,000 3,800,000 5,600,000 3,600,000 Requirements: a. Compute for the premium expenses in 2004 and 2005, respectively. Assume expectations coincide with actual results. b. Compute for the liabilities for premium as of December 31, 2004 and December 31, 2005, respectively.

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 960,000 2005 800,000 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 7,500,000 9,000,000 3,800,000 5,600,000 3,600,000 Requirements: a. Compute for the premium expenses in 2004 and 2005, respectively. Assume expectations coincide with actual results. b. Compute for the liabilities for premium as of December 31, 2004 and December 31, 2005, respectively.

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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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 20X4 and 20X5 are as follows (assume all purchases and sales are for cash): 20X4 20X5 Coffee mugs purchased 960,000 800,000 Candy bars sold 7,500,000 9,000,000 Wrappers redeemed 3,800,000 5,600,000 20X4 wrappers expected to be redeemed in 20X5 2,600,000 20X5 wrappers expected to be redeemed in 20X6 3,600,000 How much are the liabilities for premium as of December 31, 20X4 and December 31, 20X5, respectively?
Sheridan Candy Company offers a coffee mug as a premium for every ten $1 candy bar wrappers presented by customers together with $2. The purchase price of each mug to the company is $2.40; in addition it costs $1.60 to mail each mug. The results of the premium plan for the years 2020 and 2021 are as follows (assume all purchases and sales are for cash): Coffee mugs purchased Candy bars sold Wrappers redeemed 2020 wrappers expected to be redeemed in 2021 2021 wrappers expected to be redeemed in 2022 2020 2021 710,000 800,000 5,700,000 6,980,000 2,800,000 4.160,000 2,000,000 2,700,000
Cheyenne offers an MP3 download (seven-single medley) as a premium for every 6 candy bar wrappers presented by customers together with $3.05. The candy bars are sold by the company to distributors for 30 cents each. The purchase price of each download code to the company is $2.80. In addition, it costs 50 cents to distribute each code. The results of the premium plan for the years 2020 and 2021 are as follows. (All purchases and sales are for cash.) 2020 2021 MP3 codes purchased 315,000 415,800 Candy bars sold 2,630,800 2,667,200 Wrappers redeemed 1,512,000 1,890,000 2020 wrappers expected to be redeemed in 2021 365,400 2021 wrappers expected to be redeemed in 2022 441,000 Prepare the journal entries that should be made in 2020 and 2021 to record the transactions related to the premium plan of the Cheyenne. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are…
Cheyenne offers an MP3 download (seven-single medley) as a premium for every 6 candy bar wrappers presented by customers together with $2.60. The candy bars are sold by the company to distributors for 30 cents each. The purchase price of each download code to the company is $2.35. In addition, it costs 50 cents to distribute each code. The results of the premium plan for the years 2020 and 2021 are as follows. (All purchases and sales are for cash.) 2020 2021MP3 codes purchased 270,000 356,400Candy bars sold 2,993,500 2,832,900Wrappers redeemed 1,296,000 1,620,0002020 wrappers expected to be redeemed in 2021 313,200 2021 wrappers expected to be redeemed in 2022 378,000 Collapse question part(a)Prepare the journal entries that should be made in 2020 and 2021 to record the…
Cheyenne offers an MP3 download (seven-single medley) as a premium for every 6 candy bar wrappers presented by customers together with $2.60. The candy bars are sold by the company to distributors for 30 cents each. The purchase price of each download code to the company is $2.35. In addition, it costs 50 cents to distribute each code. The results of the premium plan for the years 2020 and 2021 are as follows. (All purchases and sales are for cash.) 2020 2021 MP3 codes purchased 270,000 356,400 Candy bars sold 2,993,500 2,832,900 Wrappers redeemed 1,296,000 1,620,000 2020 wrappers expected to be redeemed in 2021 313,200 2021 wrappers expected to be redeemed in 2022 378,000 (a) Prepare the journal entries that should be made in 2020 and 2021 to record the transactions related to the premium plan of the Cheyenne. (If no entry is required, select "No Entry" for the…
Sheridan offers an MP3 download (seven-single medley) as a premium for every 6 candy bar wrappers presented by customers together with $3.45. The candy bars are sold by the company to distributors for 30 cents each. The purchase price of each download code to the company is $3.20. In addition, it costs 50 cents to distribute each code. The results of the premium plan for the years 2020 and 2021 are as follows. (All purchases and sales are for cash.) 2020 2021 MP3 codes purchased 360,000 475,200 Candy bars sold 2,860,400 2,669,400 Wrappers redeemed 1,728,000 2,160,000 2020 wrappers expected to be redeemed in 2021 417,600 2021 wrappers expected to be redeemed in 2022 504,000 Part 1 Prepare the journal entries that should be made in 2020 and 2021 to record the transactions related to the premium plan of the Sheridan. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit…
Sycamore Candy offers an MP3 download (seven-single medley) as a premium for every five candy bar wrappers presented by customers together with $2.50. The candy bars are sold by the company to distributors for 30 cents each. The purchase price of each download code to the company is $2.25. In addition, it costs 50 cents to distribute each code. The results of the premium plan for the years 2020 and 2021 are as follows. (All purchases and sales are for cash.) $1000 2020 $1000 2021 MP3 codes purchased 250,000 330,000 Candy bars sold 2,895,400 2,743,600 Wrappers redeemed 1,200,000 1,500,000 2020 wrappers expected to be redeemed in 2021 290,000 2021 wrappers expected to be redeemed in 2022 350,000 Instructions a. Prepare the journal entries that should be made in 2020 and 2021 to record the transactions related to the premium plan of the Sycamore Candy. b. Indicate the account names, amounts, and classifications of the items related to the premium…
Sycamore Candy offers an MP3 download (seven-single medley) as a premium for every 5 candy bar wrappers presented by customers together with $2.50. The candy bars are sold by the company to distributors for 30 cents each. The purchase price of each download code to the company is $2.25. In addition, it costs 50 cents to distribute each code. The results of the premium plan for the years 2020 and 2021 are as follows. (All purchases and sales are for cash.) MP3 codes purchased 250,000 330,000 Candy bars sold 2,895,400 2,743,600 Wrappers redeemed 1,200,000 1,500,000 2020 wrappers expected to be redeemed in 2021 290,000 2021 wrappers expected to be redeemed in 2022 (350,000) Prepare the journal entries that should be made in 2020 and 2021 to record the transactions related to the premium plan of the Sycamore Candy.
Miracle Company manufactures a product that is packaged and sold. A plate is offered to customers sending in three wrappers accompanied by a remittance of P10. Data with respect to the premium offer are summarized below. 2020 2021 Sales 3,600,000 4,200,000 Purchase of premium, P50 per plate 390,000 580,000 Number of plates distributed as premiums 5,000 9,000 Estimated number of plates to be distributed in subsequent period 2,000 3,000 Distribution cost is P20 per plate Required: Prepare journal entries that would be made in 2020 and 2021 to record sales, premium purchases and redemptions, and year-end adjustments.
Backyard World buys plastic pools from a supplier with an invoice amount of $13,500. The terms of the sale are 5/10, n/30. If the retailer sends a partial payment of $8,300 on the discount date, what is the net amount still due?
Glam company offers customers a pottery cereal bowl if they send in three boxtops from its products and P10. The entity estimated that 60% of the boxtops will be redeemed. During the current year, the entity sold 675,000 boxes and customers redeemed 330,000 boxtops receiving 110,000 bowls. The cost of each bowl is P25. 1a. What is the premium expense for the current year? a. 1,650,000 b. 2,025,000 c. 4,550,000 d. 6,075,000 1b. What is the liability for outstanding premiums at year-end? a. 250,000 b. 375,000 c. 625,000 d. 875,000
Crane Frosted Flakes Company offers its customers a pottery cereal bowl if they send in 3 proof of purchase seals from Crane Frosted Flakes boxes and $1. The company estimates that 60% of the proof of purchase seals will be redeemed. In 2026, the company sold 1404000 boxes of Frosted Flakes, and customers redeemed 686400 proof of purchase seals receiving 228800 bowls. If the bowls cost Crane Company $3 each, how much liability for outstanding premiums should be recorded at the end of 2026? $104000 O $156000 $287040 O $561600