D. An entity placed a coupon redeemable for a premium in each package of cerealsold. Each premium cost P20 and five coupons must be presented by a customer toreceive a premium. The entity estimated that only 60% of the coupons issued wouldbe redeemable. For the year ended December 31, 2021, the following information isavailable:Packages of cereal sold 160,000Premium purchased 12,000Coupons redeemed 40,0005. What is the premium expense for 2021?6. What is the estimated premium liability on December 31, 2021?

The liabilities are the amount that company owes to its creditors and due to be paid. Expenses are…

Answered: D. An entity placed a coupon redeemable…

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

Chapter9: Current Liabilities And Contingent Obligations

Section: Chapter Questions

Problem 19E

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In 2021 , Holyoak offers a coupon for $ 15 off qualifying purchases of its new line of products Holyoak sold 11,000 of these products during the year By year - end of 2021 , 8,100 coupons had be $ 15 reduction of purchase price provided to customers Holyoak's historical experience with such coupons indicates that 80 % of customers use the coupon Holyoak recognizes coupon expense are issued What is the expense that Holyoak should report for its promotional coupons in its 2021 income statement ? Choice 132,000 121,500 165,000 132.500
During 2020, Gray Company sold 500,000 boxes of cake mix under a new sales promotional program. Each box contained one coupon, which entitled the customer to a baking pan upon remittance of P40. The entity paid P50 per pan and P5 for handling and shipping. The entity estimated that 80% of the coupons will be redeemed, even though only 300,000 coupons had been processed during 2020. 2a. What amount should be reported as premium expense for 2020? a. P 2,000,000 b. P 4,500,000 c. P 6,000,000 d. P 7,500,000 2b. What amount should be reported as liability for unredeemed coupons on December 31, 2020? a. 1,000,000 b. 1,500,000 c. 3,000,000 d. 5,000,000
In an effort to increase sales, DDD Company inaugurated a sales promotional campaign on June 30, 2020. The entity placed a coupon redeemable for a premium in each package of cereal sold. Each premium cost P20 and five coupons must be presented by a customer to receive a premium. The entity estimated that only 60% of the coupons issued will be redeemed. For the six months ended December 31, 2020, the following information is available:Packages of cereal sold - 160,000Premiums purchased - 12,000Coupons redeemed - 40,000 Prepare the necessary journal entries for this transaction (i.e. recognition of the premium expense and its ultimate redemption.)
In December 2021, Belarmino Company began including one coupon in each package of candy that is sells and offering a toy in exchange of P5 and five coupons. The toys cost P8 each. Eventually, 60% of the coupons will be redeemed. During December, Belarmino Company sold 110,000 packages of candy and no coupons were redeemed. Belarmino Company should report an estimated liability for coupons of Group of answer choices 105,600 198,000 39,600 528,000
Please show your solution in good accounting form In 2021, SUGA Company sold 485,000 boxes of cereals under a new sales promotional program. Each box contains one coupon, which entitles the customer to a premium that costs the company ₱75. Five coupons plus a remittance of ₱20 must be presented by the customer to receive a premium. SUGA estimated that 85% of the coupons will be redeemed. Actual premiums redeemed were 5,000 units. Additional information disclosed that ₱10 per premium is incurred for storage and distribution. a. Compute for the liability for the unredeemed coupons. b. Compute for the premium expense for the year.
During 2021, SUGA Company sold 485,000 boxes of cereals under a new sales promotional program. Each box contains one coupon, which entitles the customer to a premium that cost the company ₱75. Five coupons plus a remittance of ₱20 must be presented by the customer to receive a premium. SUGA estimated that 85% of the coupons will be redeemed. Actual premiums redeemed were 5,000 units. Additional information disclosed that ₱10 per premium is incurred for storage and distribution. Compute for the liability for the unredeemed coupons.
During 2021, SUGA Company sold 485,000 boxes of cereals under a new sales promotional program. Each box contains one coupon, which entitles the customer to a premium that cost the company ₱75. Five coupons plus a remittance of ₱20 must be presented by the customer to receive a premium. SUGA estimated that 85% of the coupons will be redeemed. Actual premiums redeemed were 5,000 units. Additional information disclosed that ₱10 per premium is incurred for storage and distribution. Compute for the premium expense for the year.
During 2021, SUGA Company sold 485,000 boxes of cereals under a new sales promotional program. Each box contains one coupon, which entitles the customer to a premium that cost the company ₱75. Five coupons plus a remittance of ₱20 must be presented by the customer to receive a premium. SUGA estimated that 85% of the coupons will be redeemed. Actual premiums redeemed were 5,000 units. Additional information disclosed that ₱10 per premium is incurred for storage and distribution. REQUIRED: 1. Compute for the liability for the unredeemed coupons. 2. Compute for the premium expense for the year.
What is the total face amount of coupons issued by JENNIE Inc. in 2021? In packages of its products, JENNIE Inc. includes coupons that may be presented at retail stores to obtain discounts on other JENNIE products. Retailers are reimbursed for the face amount of coupons redeemed plus 10% of that amount for handling costs. JENNIE honors requests for coupon redemption by retailers up to 3 months after the consumer expiration date. JENNIE estimates that 60% of all coupons issued will ultimately be redeemed. Information relating to coupons issued by JENNIE during 2021 is as follows: Consumer expiration date - December 31, 2021; Total payments to retailers as of December 31, 2021 - ₱165,000; Liability for unredeemed coupons as of December 31, 2021 - ₱99,000. a.) ₱ 440,000 b.) ₱ 400,000 c.) ₱ 600,000 d.) ₱ 264,000
During 2020, Maine Company Sold 50,000 boxes of hotcakes under a new sales promotional program. Each box contains one coupon, which when submitted with P 16, entitles the customer to a banking pan. Maine Co. pay P 20 per pan and P 2 handling and shipping. Maine estimates that 80% of the coupons will be redeemed, even though only 30,000 coupons had been processed during 2020. What amount should Maine report as a liability for unredeemed coupons at Dec. 31, 2020? * A.P 1,000,000 B.P 400,000 C.P 600,000 D.P 300,000
At the beginning of the current year, Clan Company offers the customers a pottery bowl if they send in three boxtops from the products and P10. The entity estimated that 60% of the boxtops would be redeemed.During the year, the entity sold 675,000 boxes and customers redeemed 330,000 boxtops receiving 110,000 bowls. The cost of each bowl is P 25.What is the liability for outstanding premium at year-end?
Ben and Co. inaugurated a sales promotion campaign on May 31, 2019, whereby Ben placed a coupon in each package of chocolate sold, the coupons being redeemable for a premium. Each premium costs Ben P 50 and a customer to receive a coupon must present five coupons. Ben estimated that only 60 % of the coupon issued would be redeemed. For the seven months ended Dec. 3, 2019, the following information is available: Packages of chocolates sold 400,000 Premium purchased 30,000 Coupons redeemed 100,000 How much is the estimated liability for premium claims outstanding at Dec. 31, 2019? * A.P 180,000 B.P 140,000 C.P 240,000 D.P 100,000

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