Cascade Company manufactures a single laundry soap. A towel is offered as a premium to customers who send in two proof-of-purchase seals from the soap boxes and a remittance of P20. The corporation incurs a distribution cost of P5 per towel. Data for the premium offer are: 2021 2022 Soap sales P 2,500,000 P 3,125,000 Towel purchases (P100 per towel) 175,000 200,000 Number of towels distributed as premium 1,000 pieces 1,800 pieces Number of towels expected to be distributed as premium in the subsequent period 600 pieces 800 pieces 1. What is the balance of the estimated premium liability at December 31, 2022? 2. What is the balance of the premiums inventory as of December 31, 2022?
Cascade Company manufactures a single laundry soap. A towel is offered as a premium to customers who send in two proof-of-purchase seals from the soap boxes and a remittance of P20. The corporation incurs a distribution cost of P5 per towel. Data for the premium offer are:
2021 2022
Soap sales P 2,500,000 P 3,125,000
Towel purchases (P100 per towel) 175,000 200,000
Number of towels distributed as premium 1,000 pieces 1,800 pieces
Number of towels expected to be distributed
as premium in the subsequent period 600 pieces 800 pieces
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