Beginning the year 2021, the Chicken Wings Manufacturing Company (CWMC) began marketing its iphone XV (pronounced as X Five). Each XV sells for P50,000. To promote and expedite sales of this product, the management of AMC is offering one proof of purchase seal for a special slim transparent case to each customer for every unit of XV purchased. CWMC estimates that out of the units sold during 2021, only 60% of the proof of purchase seals will be redeemed. Sales of XV during 2021 totaled P40 million. For that year, 500 special slim transparent cases were purchased by the company at a total cost of P750,000. These 500 special slim transparent cases have a total sales value of P1,000,000. A total of 256 special slim transparent cases were distributed to customers during the year 2021. How much is the unearned revenue for unredeemed premiums reported in CWMC’s December 31, 2021 statement of financial position?
Beginning the year 2021, the Chicken Wings Manufacturing Company (CWMC) began marketing its iphone XV (pronounced as X Five). Each XV sells for P50,000. To promote and expedite sales of this product, the management of AMC is offering one proof of purchase seal for a special slim transparent case to each customer for every unit of XV purchased. CWMC estimates that out of the units sold during 2021, only 60% of the proof of purchase seals will be redeemed. Sales of XV during 2021 totaled P40 million. For that year, 500 special slim transparent cases were purchased by the company at a total cost of P750,000. These 500 special slim transparent cases have a total sales value of P1,000,000. A total of 256 special slim transparent cases were distributed to customers during the year 2021.
How much is the unearned revenue for unredeemed premiums reported in CWMC’s December 31, 2021
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