ROSE Corporation has a premiums payable balance of P242,000 on December 31, 2019 for a promotional
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
ROSE Corporation has a premiums payable balance of P242,000 on December 31, 2019 for a promotional program the company has started in 2019. For every 5 product labels the customer surrenders plus P50, the customer receives a specially designed wall clock which the company purchases at a cost P160/unit. Details about the said promotional program in 2019 and 2020 are as follows: 2019 2020 Sales in units 50,000 60,000 Premiums purchased in units 3,000 6,000 Inventory of premiums at the end of the year 1,200 2,100 ROSE estimates that from the labels issued with products sold, 40% shall be presented for the said promotional plan redemption.
1) What is the correct premiums payable as of December 31, 2020?
2) What is the correct premiums expense as of December 31, 2020?
3)What is the correct premiums inventory as of December 31, 2020?
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