Las Piñas Company includes one coupon in each package of cereal it sells. A towel is offered as a premium to customers who send in 10 cuopons. Data for the premium offer are: 2018 2019 Packages of cereal sold 500,000 800,000 # of towels purchased at 40 per towel 30,000 60,000 # of towels distributed as premiums 20,000 50,000 # of towels to be distributed as premium Next period 5,000 3,000 In its 2019 income statement, what amount of premium expense should be reported?

Las Piñas Company includes one coupon in each package of cereal it sells. A towel is offered as a premium to customers who send in 10 cuopons. Data for the premium offer are: 2018 2019 Packages of cereal sold 500,000 800,000 # of towels purchased at 40 per towel 30,000 60,000 # of towels distributed as premiums 20,000 50,000 # of towels to be distributed as premium Next period 5,000 3,000 In its 2019 income statement, what amount of premium expense should be reported?

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 21E: Cash Rebates On January 1, 2020, Fro-Yo Inc. began offering customers a cash rebate of 5.00 if the...

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Cash Rebates On January 1, 2020, Fro-Yo Inc. began offering customers a cash rebate of 5.00 if the customer mails in 10 proof-of-purchase labels from its frozen yogurt containers. Eased on historical experience, the company estimates that 20% of the labels will be redeemed. During 2020, the company sold 5,000,000 frozen yogurt containers at 1 per container. From these sales, 800,000 labels were redeemed in 2020, 150,000 labels were redeemed in 2021, and the remaining labels were never redeemed. Required: 1. Prepare the journal entries related to the sale of frozen yogurt and the cash rebate offer for 2020 and 2021. 2. Next Level Assume that 300,000 labels were redeemed in 2021. Prepare the journal entries related to the cash rebate offer for 2021.
Premium Obligation Yummy Cereal Company is offering one toy shovel set for 15 box tops of its cereal. Year-to-date sales have been off, and it is hoped that this offer will stimulate demand. Each shovel set costs the company 3. The following data are available for the last 3 months of 2019: It is estimated that only 70% of the box tops will be redeemed. The cereal sells for 2.80 per box. Required: 1. Prepare journal entries for each month to record sales, shovel set purchases, and redemptions. 2. Assuming Yummy prepares monthly financial statements, indicate how the inventory of premiums and the estimated liability would be disclosed on Yummys ending balance sheets for October, November, and December.
WET Company includes one coupon in each package of cereal it sells. A towel is offered as a premium to customerswho send in 10 coupons. Data for the premium offer are: 2019 2020Packages of cereal sold 500,000 800,000Number of towels purchased at P40 per towel 30,000 60,000Number of towels distributed as premium 20,000 50,000Number of towels to be distributed as premiumnext period 5,000 3,000In its 2020 statement of comprehensive income, WET Company should report premium expense of:a. P2,400,000 b. P2,000,000 c. P2,120,000 d. P1,920,000
ABC Company includes one coupon in each box of laundry soap it sells. A towel is offered as premium to customers who send in 10 coupons and a remittance of P20. Data of the premium offer are: 2019 2020 Boxes of soap sold 500,000 800,000 No. of towels purchased (P100 per towel) 20,000 25,000 Coupons redeemed 140,000 200,000 ABC Company's experience indicates that only 30% of the coupons will be redeemed. How much is the estimated liability for premiums on December 31, 2020? Round answer to whole number.
Sweet Dates Company offers a premium to its customers—a glass bowl (cost to Sweet Dates is $0.90) upon return of 40 coupons. Two coupons are placed in each box of dates sold. The company estimates, on the basis of past experience, that only 70% of the coupons will ever be redeemed. During 2019, 10 million boxes of dates are sold at $0.30 each. Eight million coupons are redeemed during 2019. Sweet Dates purchased 360,000 glass bowls for the plan on January 1, 2019. Required: 1. Prepare the journal entries related to the sale of dates and the premium plan in 2019. 2. Show how the preceding items would be reported on the December 31, 2019, balance sheet.
On the back of its cereal boxes, Tiger Cereal Company offers a premium to its customers. The premium, a toy truck, may be claimed by sending in $1 plus 10 coupons; one coupon is included in each box of cereal sold. Tiger estimates, based on past experience, that 60% of the coupons will be redeemed. During 2019, Tiger purchased 240,000 toy trucks at $1.25 each for the premium promotion and sold 5,000,000 boxes of cereal at $1.80 per box. In 2019, 2,200,000 coupons were redeemed. Required: 1. Prepare the journal entries related to the previous promotion (including sales) for 2019. 2. Show how the items related to the premium plan would be reported on the December 31, 2019, balance sheet.
No Doubt Company includes one coupon in each box of soap powder that it packs, and 10 coupons are redeemable for a premium (a kitchen utensil). In 2020, No Doubt Company purchased 8,800 premiums at 80 cents each and sold 110,000 boxes of soap powder at $3.30 per box; 44,000 coupons were presented for redemption in 2020. It is estimated that 60% of the coupons will eventually be presented for redemption. Instructions Prepare all the entries that would be made relative to sales of soap powder and to the premium plan in 2020.
Phoenix Company, places a coupon in each box of its product. Customers may send in ten coupons and P3.00, and the company will send them a romantic pillow. Sufficient pillows were purchased at P5.40 a piece. During 2019, 1,260,000 boxes were sold. It was estimated that a total of 5% of the coupons will be redeemed. In 2019, 18,000 coupons were redeemed. How much is the premium expense for the year 2019?
Phoenix Company, places a coupon in each box of its product. Customers may send in ten coupons and P3.00, and the company will send them a romantic pillow. Sufficient pillows were purchased at P5.40 a piece. During 2019, 1,260,000 boxes were sold. It was estimated that a total of 5% of the coupons will be redeemed. In 2019, 18,000 coupons were redeemed. How much is the liability for premiums outstanding as of December 31, 2019? 43,200 24,300 15,120 45,200 10,800
Marigold Company includes one coupon in each box of soap powder that it packs, and 10 coupons are redeemable for a premium (a kitchen utensil). In 2020, Marigold Company purchased 9,100 premiums at 75 cents each and sold 101,000 boxes of soap powder at $ 3.60 per box; 40,800 coupons were presented for redemption in 2020. It is estimated that 60% of the coupons will eventually be presented for redemption.Prepare all the entries that would be made relative to sales of soap powder and to the premium plan in 2020. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)
Sunland Candy Company offers a coffee mug as a premium for every ten $1 candy bar wrappers presented by customers together with $2. The purchase price of each mug to the company is $2.40; in addition it costs $1.60 to mail each mug. The results of the premium plan for the years 2020 and 2021 are as follows (assume all purchases and sales are for cash): 2020 2021 Coffee mugs purchased 750,000 820,000 Candy bars sold 5,600,000 6,760,000 Wrappers redeemed 2,700,000 4,250,000 2020 wrappers expected to be redeemed in 2021 1,900,000 2021 wrappers expected to be redeemed in 2022 2,680,000 Part 1 Partially correct answer icon Your answer is partially correct. Prepare the general journal entries that should be made in 2020 and 2021 related to the above plan by Sunland Candy. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit…
Sunland Candy Company offers a coffee mug as a premium for every ten $1 candy bar wrappers presented by customers together with $2. The purchase price of each mug to the company is $2.40; in addition it costs $1.60 to mail each mug. The results of the premium plan for the years 2020 and 2021 are as follows (assume all purchases and sales are for cash): 2020 2021 Coffee mugs purchased 750,000 820,000 Candy bars sold 5,600,000 6,760,000 Wrappers redeemed 2,700,000 4,250,000 2020 wrappers expected to be redeemed in 2021 1,900,000 2021 wrappers expected to be redeemed in 2022 2,680,000 Part 1 Prepare the general journal entries that should be made in 2020 and 2021 related to the above plan by Sunland Candy. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit 2020 (To record…