Glam company offers customers a pottery cereal bowl if they send in three boxtops from its products and P10. The entity estimated that 60% of the boxtops will be redeemed. During the current year, the entity sold 675,000 boxes and customers redeemed 330,000 boxtops receiving 110,000 bowls. The cost of each bowl is P25. 1a. What is the premium expense for the current year? a. 1,650,000 b. 2,025,000 c. 4,550,000 d. 6,075,000 1b. What is the liability for outstanding premiums at year-end? a. 250,000 b. 375,000 c. 625,000 d. 875,000
Glam company offers customers a pottery cereal bowl if they send in three boxtops from its products and P10. The entity estimated that 60% of the boxtops will be redeemed. During the current year, the entity sold 675,000 boxes and customers redeemed 330,000 boxtops receiving 110,000 bowls. The cost of each bowl is P25. 1a. What is the premium expense for the current year? a. 1,650,000 b. 2,025,000 c. 4,550,000 d. 6,075,000 1b. What is the liability for outstanding premiums at year-end? a. 250,000 b. 375,000 c. 625,000 d. 875,000
Chapter5: Introduction To Business Expenses
Section: Chapter Questions
Problem 63P
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Question
Glam company offers customers a pottery cereal bowl if they send in three boxtops from its products and P10.
The entity estimated that 60% of the boxtops will be redeemed.
During the current year, the entity sold 675,000 boxes and customers redeemed 330,000 boxtops receiving 110,000 bowls. The cost of each bowl is P25.
1a. What is the premium expense for the current year?
a. 1,650,000
b. 2,025,000
c. 4,550,000
d. 6,075,000
1b. What is the liability for outstanding premiums at year-end?
a. 250,000
b. 375,000
c. 625,000
d. 875,000
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