During 2020, Bart Inc. inaugurated new sales promotional program. For every 10 cereal box tops returned to Bart, customers will receive an attractive prize. Bart estimates that only 30% of the cereal box tops reaching the customers will be redeemed Units Amounts Sales of cereal box 2,000,000 2,4000,000 Purchase of prizes 36,000 180,000 Prizes distributed to customers 28,000 The accountant of Bart Inc. journalized the purchase of prizes as a debit to premium expense and credit to cash. He just prepared a memo entry for prizes distributed. Required: Prepare any necessary audit adjusting entries.

During 2020, Bart Inc. inaugurated new sales promotional program. For every 10 cereal box tops returned to Bart, customers will receive an attractive prize. Bart estimates that only 30% of the cereal box tops reaching the customers will be redeemed Units Amounts Sales of cereal box 2,000,000 2,4000,000 Purchase of prizes 36,000 180,000 Prizes distributed to customers 28,000 The accountant of Bart Inc. journalized the purchase of prizes as a debit to premium expense and credit to cash. He just prepared a memo entry for prizes distributed. Required: Prepare any necessary audit adjusting entries.

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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to stimulate the sales of its Alladin breakfast cereal, Loptien Company places 1 coupon in each box. Five coupons are redeemable for a premium consisting of a children’s hand puppet. In 2021, the company purchases 40,000 puppets at $1.50 each and sells 480,000 boxes of Alladin at $3.75 a box. From its experience with other similar premium offers, the company estimates that 40% of the coupons issued will be mailed back for redemption. During 2021, 115,000 coupons are presented for redemption. Instructions Prepare the journal entries that should be recorded in 2021 relative to the premium plan.
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Beginning the year 2020, the ABC Company began marketing its phone. Each phone sells for P50,000. To promote and expedite sales of this product, the management of ABC is offering one proof of purchase seal for a special slim transparent case to each customer for every unit of Samsung phone. ABC estimates that out of the units sold during 2020, only 60% of the proof of purchase seals will be redeemed. Sales of phone during 2021 totaled P50 million. For that year, 625 special slim transparent cases were purchased by the company at a total cost of P750,000. These 625 special slim transparent cases have a total sales value of P1,250,000. A total of 320 special slim transparent cases were distributed to customers during the year 2020. How much is the unearned revenue for unredeemed premiums reported in ABC's December 31, 2020 statement of financial position?
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