EBK FOUNDATIONS OF FINANCE
10th Edition
ISBN: 9780134897288
Author: PETTY
Publisher: VST
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Chapter 14, Problem 2SP
a)
Summary Introduction
To determine: Balance of accounts receivables at the end of April month.
b)
Summary Introduction
To determine: Cash collected during the month of April.
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Pop company sells banana juice. In order to promote the drink, the entity inaugurated in
the current year a premium plan called "Drink-N-Win."
For every 10 bottle caps and P5 turned in, customers receive an attractive ball-pen and
become eligible for a grand prize of P5,000 in each awarded for every 100 tops turned in.
The entity estimated that only 25% of bottle caps reaching the hands of customers will be
presented for redemption.
During the current year, the entity sold 400,000 bottles of banana juice at P9 each,
purchased 10,000 ball point pens for a total cost of P900,000, and incurred nondeferrable
costs of P30,000 applicable to the premium plan.
A total of 8,000 pens have been redeemed and thirty grand prizes have been awarded.
Required:
Prepare journal entries to record the transactions relating to the premium plan for the
current year.
SMITH'S MARKET (SMALL BUSINESS CASH SALES ACCOUNTING SYSTEM)
In 1989, Robert Smith opened a small fruit and vegetable market in Bethlehem, Pennsylvania. Originally, Smith sold only produce grown on his family farm and orchard. As the market's popularity grew, however, he added bread, canned goods, fresh meats, and a limited supply of frozen goods. Today Smith's Market is a full-range farmers' market with a strong local customer base. Indeed, the market's reputation for low prices and high quality draws customers from other Pennsylvania cities and even from the neighboring state of New Jersey. Currently Smith's has 40 employees. These include sales staff, shelf stockers, farm laborers, shift supervisors, and clerical staff. Recently, Smith has noticed a decline in profits and sales, while his purchases of products for resale have continued to rise. Although the company does not prepare audited financial statements, Robert Smith has commissioned your public accounting firm to assess…
Smith’s Market (Small Business Cash Sales Accounting System)
In 1989 Robert Smith opened a small fruit and vegetable market in Bethlehem, Pennsylvania. Originally Smith sold only produce grown on his family farm and orchard. As the market’s popularity grew, however, he added bread, canned goods, fresh meats, and a limited supply of frozen goods. Today Smith’s Market is a full-range farmers’ market with a strong local customer base. Indeed, the market’s reputation for low prices and high quality draws customers from other Pennsylvania cities and even from the neighboring state of New Jersey. Currently Smith’s has 40 employees. These include sales staff, shelf stockers, farm laborers, shift supervisors, and clerical staff. Recently Smith has noticed a decline in profits and sales, while his purchases of products for resale have continued to rise. Although the company does not prepare audited financial statements, Robert Smith has commissioned your public accounting firm to assess his…
Chapter 14 Solutions
EBK FOUNDATIONS OF FINANCE
Ch. 14 - Prob. 1RQCh. 14 - Discuss the shortcomings of the percent of sales...Ch. 14 - Prob. 3RQCh. 14 - Prob. 4RQCh. 14 - Prob. 1SPCh. 14 - Prob. 2SPCh. 14 - (Financial forecastingdiscretionary financing...Ch. 14 - (Financial forecastingpercent of sales) Next years...Ch. 14 - Prob. 5SPCh. 14 - (Percent of sales forecasting) Which of the...
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- XYZ Ltd. is a health foods distributor and retailer initiated a customer loyalty program that offers member points to redeem a bottle of its ‘X-Premium’ wine. The premium wine costs the company $30 per bottle and retails for $80 per bottle. Points are issued only during the month of December 20x0 and the redemption period is valid until February 20x1. Every $10 dollars spent in December will entitle the customer one point, and a bottle of the premium wine may be redeemed without cost with 100 points. December sales amounted to $210,560 and 21,000 points were issued. XYZ expects 80% if the points to be redeemed. At the end of December 20x0, 10,000 points were used for redemption. 4,000 and 2,000 points were redeemed in January and February respectively. Required: a) Prepare the Journal entries to record the sales in December, January and February 20X1. b) Discuss what if in February, 3,000 points were redeemed instead?arrow_forwardPrepare journal entries for the following transactions from Barrels Warehouse. Jul. 1 Sold 5,000 barrels with a sales price of $40 per barrel to customer Luck’s Vineyards. Luck’s Vineyards paid with cash.The cost for this sale is $20 per barrel. Jul. 3 Sold 1,500 barrels with a sales price of $32 per barrel to customer Paramount Apparel.Paramount paid using its in-house credit account. Terms of the sale are 3/10, n/30. The cost for this sale is $17 per barrel. Jul. 5 Sold 1,400 barrels with a sales price of $35 per barrel to customer Melody Sharehouse. Melody paid using her MoneyPlus credit card.The cost for this sale is $18 per barrel. MoneyPlus Credit Card Company charges Barrels Warehouse a 2% usage fee based on the total sale per transaction. Jul. 8 MoneyPlus Credit Card Company made a cash payment in full to Barrels Warehouse for the transaction from July 5, less any usage fees. Jul. 13 Paramount Apparel paid its account in full with a cash payment, less any discounts.…arrow_forwardFreesure Company manufactures and sells commercial refrigerators. It is currently running a promotion in which it pays a $500 rebate to any customer that purchases a refrigeration unit from one of its participating dealers. The rebate must be returned within 90 days of purchase. Given its historical experience and the ease of obtaining a rebate, Freesure expects all qualifying customers to receive the rebate. Required: Prepare the journal entry to record the sale of a refrigerator to a participating dealer for $6,000.arrow_forward
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