1. Beginning the year 2020, Polk Company began marketing a new beer called "Serbesa". To help promote the product, the management of Polk is offering a special Serbesa beer mug to each customer for every 20 specially marked bottles of Serbesa. Polk estimates that out of the 300,000 bottles of Serbesa sold during 2020, only 30% of the bottle caps will be redeemed. For the year 2020, 5,000 beer mugs were ordered by the company at a total cost of P140,000. A total of 4,000 mugs were already distributed to customers. What is the amount of the liability that Polk should report on its December 31, 2020 statement of financial position? *

1. Beginning the year 2020, Polk Company began marketing a new beer called "Serbesa". To help promote the product, the management of Polk is offering a special Serbesa beer mug to each customer for every 20 specially marked bottles of Serbesa. Polk estimates that out of the 300,000 bottles of Serbesa sold during 2020, only 30% of the bottle caps will be redeemed. For the year 2020, 5,000 beer mugs were ordered by the company at a total cost of P140,000. A total of 4,000 mugs were already distributed to customers. What is the amount of the liability that Polk should report on its December 31, 2020 statement of financial position? *

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter7: Inventories: Cost Measurement And Flow Assumptions

Section: Chapter Questions

Problem 3MC: During 2019, R Corp., a manufacturer of chocolate candies, contracted to purchase 100,000 pounds of...

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Beginning the year 2022, the Polk Company began marketing a new beer called “Serbesa”. Each bottle of beer sells for P30. To help promote the product, the management of Polk is offering a special Serbesa beer mug to each customer for every 20 specially marked bottles of Serbesa. Polk estimates that out of the 300,000 bottles of Serbesa sold during 2022, only 30% of the bottle caps will be redeemed. For the year 2022, 5,000 beer mugs were purchased by the company at a total cost of PI40,000. These 5,000 mugs have a total sales value of P200,000. A total of 4,000 mugs were distributed to customers during the year 2022. What amount of unearned revenue for unredeemed premiums should Polk report on its December 31, 2022 statement of financial position? How much additional sales should Polk recognize upon distribution of the 4,000 mugs?
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