menu
bartleby
search
close search
Hit Return to see all results
Subscribe
Sign in

Business
AccountingIntermediate Accounting: Reporting And Analysis3rd Edition

close solutoin list
Chapter 9, Problem 16P
BuyFindarrow_forward

Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281

Solutions

Chapter
Section
Problem 1GI
Problem 2GI
Problem 3GI
Problem 4GI
Problem 5GI
Problem 6GI
Problem 7GI
Problem 8GI
Problem 9GI
Problem 10GI
Problem 11GI
Problem 12GI
Problem 13GI
Problem 14GI
Problem 15GI
Problem 16GI
Problem 17GI
Problem 18GI
Problem 19GI
Problem 20GI
Problem 21GI
Problem 22GI
Problem 23GI
Problem 24GI
Problem 25GI
Problem 26GI
Problem 27GI
Problem 28GI
Problem 1MC
Problem 2MC
Problem 3MC
Problem 4MC
Problem 5MC
Problem 6MC
Problem 7MC
Problem 8MC
Problem 9MC
Problem 10MC
Problem 1RE
Problem 2RE
Problem 3RE
Problem 4RE
Problem 5RE
Problem 6RE
Problem 7RE
Problem 8RE
Problem 9RE
Problem 10RE
Problem 11RE
Problem 1E
Problem 2E
Problem 3E
Problem 4E
Problem 5E
Problem 6E
Problem 7E
Problem 8E
Problem 9E
Problem 10E
Problem 11E
Problem 12E
Problem 13E
Problem 14E
Problem 15E
Problem 16E
Problem 17E
Problem 18E
Problem 19E
Problem 20E
Problem 21E
Problem 22E
Problem 1P
Problem 2P
Problem 3P
Problem 4P
Problem 5P
Problem 6P
Problem 7P
Problem 8P
Problem 9P
Problem 10P
Problem 11P
Problem 12P
Problem 13P
Problem 14P
Problem 15P
Problem 16P
Problem 17P
Problem 18P
Problem 1C
Problem 2C
Problem 3C
Problem 4C
Problem 5C
Problem 6C
Problem 7C
Problem 8C
Problem 10C
BuyFindarrow_forward

Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281
Textbook Problem
96 views

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:

Chapter 9, Problem 16P, Premium Obligation Yummy Cereal Company is offering one toy shovel set for 15 box tops of its

It is estimated that only 70% of the box tops will be redeemed. The cereal sells for $2.80 per box.

Required:

  1. 1. Prepare journal entries for each month to record sales, shovel set purchases, and redemptions.
  2. 2. Assuming Yummy prepares monthly financial statements, indicate how the inventory of premiums and the estimated liability would be disclosed on Yummy’s ending balance sheets for October, November, and December.

1.

To determine

Prepare the journal entry to record the sales, shovel set purchases and redemption for each month in the books of Company YC.

Explanation

Prepare the journal entry to record the sales made during October:

DateAccount Titles and ExplanationsDebit ($)Credit ($)
OctoberCash or Accounts receivable (21,000×$2.80)58,800 
 Sales 58,800
 (To record the sale of 21,000 cereal boxes)  

Table (1)

Prepare the journal entry to record the purchase of shovel set:

DateAccount Titles and ExplanationsDebit ($)Credit ($)
OctoberInventory of premiums (880×$3.00)2,640 
     Cash 2,640
 (To record the purchase of toy shovel sets)  

Table (2)

Prepare the journal entry to record the estimated total premium liability:

DateAccount Titles and ExplanationsDebit ($)Credit ($)
OctoberPremium expenses (2)2,940 
 Estimated premium liability 2,940
 (To record the recognition of estimated premium liability)  

Table (3)

Working note (1):

Calculate the total box tops estimated for redemption:

ParticularsAmount ($)Amount ($)
Total box tops outstanding in October 2019 (A)21,000 
Estimated percent redeemed (B)70% 
Total box tops estimated for redemption (C) (A×B) 14,700

Table (4)

Working note (2):

Calculate the amount of premium expenses:

Premium expense = [Total box tops estimated for redemptionOffer of a toy shovel set upon return of 15 top boxes×Cost of a shovel set]=14,70015×($3.00)=$2,940

Prepare the journal entry to record the redemption of 12,000 top boxes in October:

DateAccount Titles and ExplanationsDebit ($)Credit ($)
OctoberEstimated premium liability (3)2,400 
     Inventory of premiums 2,400
 (To record the redemption of 12,000 top boxes of cereals)  

Table (5)

Working note (3):

Calculate the amount of estimated premium liability:

Inventory of premiums (top boxes)redeemed }= [Number of top boxes redeemed in OctoberOffer of a toy shovel set upon return of 15 top boxes×Cost of a toy shovel set]=12,00015×$3.00=$2,400

Prepare the journal entry to record the sales made during November:

DateAccount Titles and ExplanationsDebit ($)Credit ($)
NovemberCash or Accounts receivable (24,000×$2.80)67,200 
 Sales 67,200
 (To record the sale of 24,000 cereal boxes)  

Table (6)

Prepare the journal entry to record the purchase of shovel set:

DateAccount Titles and ExplanationsDebit ($)Credit ($)
NovemberInventory of premiums (1,083×$3.00)3,249 
     Cash 3,249
 (To record the purchase of toy shovel sets)  

Table (7)

Prepare the journal entry to record the estimated total premium liability:

DateAccount Titles and ExplanationsDebit ($)Credit ($)
NovemberPremium expenses (4)3,360 
 Estimated premium liability 3,360
 (To record the recognition of estimated premium liability)  

Table (8)

Working note (3):

Calculate the total box tops estimated for redemption:

ParticularsAmount ($)Amount ($)
Total box tops outstanding in November 2019 (A)24,000 
Estimated percent redeemed (B)70% 
Total box tops estimated for redemption (C) (A×B) $16,800

Table (9)

Working note (4):

Calculate the amount of premium expenses:

Premium expense = [Total box tops estimated for redemptionOffer of a toy shovel set upon return of 15 top boxes×Cost of a shovel set]=16,80015×($3

2.

To determine

Indicate the way in which the inventory of premiums and the estimated liability would be disclosed in the ending balance sheets of Company YC for the months October, November and December.

Still sussing out bartleby?

Check out a sample textbook solution.

See a sample solution
arrow_back
Chapter 9,
Problem 15P
Chapter 9,
Problem 17P
arrow_forward

The Solution to Your Study Problems

Bartleby provides explanations to thousands of textbook problems written by our experts, many with advanced degrees!

Get Started

Chapter 9 Solutions

Show all chapter solutions add
Ch-9 P-1GICh-9 P-2GICh-9 P-3GICh-9 P-4GICh-9 P-5GICh-9 P-6GICh-9 P-7GICh-9 P-8GICh-9 P-9GICh-9 P-10GI
Ch-9 P-11GICh-9 P-12GICh-9 P-13GICh-9 P-14GICh-9 P-15GICh-9 P-16GICh-9 P-17GICh-9 P-18GICh-9 P-19GICh-9 P-20GICh-9 P-21GICh-9 P-22GICh-9 P-23GICh-9 P-24GICh-9 P-25GICh-9 P-26GICh-9 P-27GICh-9 P-28GICh-9 P-1MCCh-9 P-2MCCh-9 P-3MCCh-9 P-4MCCh-9 P-5MCCh-9 P-6MCCh-9 P-7MCCh-9 P-8MCCh-9 P-9MCCh-9 P-10MCCh-9 P-1RECh-9 P-2RECh-9 P-3RECh-9 P-4RECh-9 P-5RECh-9 P-6RECh-9 P-7RECh-9 P-8RECh-9 P-9RECh-9 P-10RECh-9 P-11RECh-9 P-1ECh-9 P-2ECh-9 P-3ECh-9 P-4ECh-9 P-5ECh-9 P-6ECh-9 P-7ECh-9 P-8ECh-9 P-9ECh-9 P-10ECh-9 P-11ECh-9 P-12ECh-9 P-13ECh-9 P-14ECh-9 P-15ECh-9 P-16ECh-9 P-17ECh-9 P-18ECh-9 P-19ECh-9 P-20ECh-9 P-21ECh-9 P-22ECh-9 P-1PCh-9 P-2PCh-9 P-3PCh-9 P-4PCh-9 P-5PCh-9 P-6PCh-9 P-7PCh-9 P-8PCh-9 P-9PCh-9 P-10PCh-9 P-11PCh-9 P-12PCh-9 P-13PCh-9 P-14PCh-9 P-15PCh-9 P-16PCh-9 P-17PCh-9 P-18PCh-9 P-1CCh-9 P-2CCh-9 P-3CCh-9 P-4CCh-9 P-5CCh-9 P-6CCh-9 P-7CCh-9 P-8CCh-9 P-10C

Additional Business Solutions

Find more solutions based on key concepts

Show solutions add

Bond premium, entries for bonds payable transactions Campbell Inc. produces and sells outdoor equipment. On Jul...

Accounting

Cash discounts are offered to encourage prompt payment by customers who buy on account.

College Accounting, Chapters 1-27

Explain how CVP analysis can be used for managerial planning.

Managerial Accounting: The Cornerstone of Business Decision-Making

Periodic inventory by three methods Dymac Appliances uses the periodic inventory system. Details regarding the ...

Financial And Managerial Accounting

Discuss three common approaches to system cut over. Comment on the advantages and disadvantages of each approac...

Accounting Information Systems

Entries for treasury stock On May 27, Hydro Clothing Inc. reacquired 75,000 shares of its common stock at 8 per...

Financial & Managerial Accounting

The beginning inventory for Dunne Co. and data on purchases and sales for a three-month period are shown in Pro...

Financial Accounting

Payroll accounts and year-end entries The following accounts, with the balances indicated, appear in the ledger...

Corporate Financial Accounting

PORTFOLIO BETA An individual has 20,000 invested in a stock with a beta of 0.6 and another 75,000 invested in a...

Fundamentals of Financial Management, Concise Edition (MindTap Course List)

(Cross-Price Elasticity) Rank the following in order of increasing (from negative to positive) cross-price elas...

ECON: MICRO4 (New, Engaging Titles from 4LTR Press)

DIVIDEND POLICY Southeastern Steel Company (SSC) was formed 5 years ago to exploit a new continuous casting pro...

Fundamentals of Financial Management (MindTap Course List)

(Demand and Supply) How do you think each of the following affected the world price of oil? (Use demand and sup...

ECON MICRO

Information Message: Rescheduling interviews. Your boss, Pete Rolhns, has scheduled three appointments to inter...

Essentials of Business Communication (MindTap Course List)

Suppose that there are 10 million workers in Canada and that each of these workers can produce either 2 cars or...

Principles of Microeconomics (MindTap Course List)

Discuss the growing importance of scanner-based research

MKTG 12:STUDENT ED.-TEXT

The following questions are based on a Human Resources Capability Model developed by the Australian Public Serv...

Management, Loose-Leaf Version

Why is a country better off not isolating itself from all other countries? Why do we have markets, and accordi...

Brief Principles of Macroeconomics (MindTap Course List)

Suppose that labor is the only input used by a perfectly competitive firm. The firms production function is as ...

Principles of Economics (MindTap Course List)

Differentiate the six categories of marketing.

Contemporary Marketing

Table 1.8 shows a data set containing information for 25 of the shadow stocks tracked by the American Associati...

STATISTICS F/BUSINESS+ECONOMICS-TEXT

Describe the various components of fluctuations in economic activity over time. Because economic activity fluct...

ECON MACRO

In your own words, how do ERP financial modules facilitate the GL/BR process?

Accounting Information Systems

Draw a circular-flow diagram. Identify the parts of the model that correspond to the flow of goods and services...

Essentials of Economics (MindTap Course List)

What information would you need to determine whether a particular business is small according to SBA guidelines...

Foundations of Business (MindTap Course List)

What is the role of technology in globalization? Explain several ways that the Internet has increased the pace ...

Economics:

Describe some of the trade-offs faced by each of the following: a. a family deciding whether to buy a new car b...

Principles of Macroeconomics (MindTap Course List)

The following is an excerpt from a conversation between Paula Marlo, the warehouse manager for Musick Foods Who...

Financial Accounting

Complete the work sheet for Ramey Company, dated December 31, 20, through the adjusted trial balance using the ...

College Accounting (Book Only): A Career Approach

On October 31, the Vermillion Igloos Hockey Club received 800,000 in cash in advance for season tickets for eig...

College Accounting (Book Only): A Career Approach

Reporting issuance and retirement of longterm debt On the basis of the details of the following bonds payable a...

Accounting (Text Only)

A company accepts incremental business at a special price that exceeds the variable cost. What other issues mus...

Financial & Managerial Accounting

How are project classifications used in the capital budgeting process?

Fundamentals of Financial Management, Concise Edition (with Thomson ONE - Business School Edition, 1 term (6 months) Printed Access Card) (MindTap Course List)

Evaluate the following statements. Determine whether each is true or false and explain your answer. a. If econo...

Exploring Economics

J.D. Power and Associates conducts vehicle quality surveys to provide automobile manufacturers with consumer sa...

Statistics for Business & Economics, Revised (MindTap Course List)

EFFECTIVE VERSUS NOMINAL INTEREST RATES Bank A pays 4% interest compounded annually on deposits, while Bank B p...

Fundamentals of Financial Management (MindTap Course List)

ADJUSTING, CLOSING, AND REVERSING ENTRIES Prepare entries for (a), (b), and (c) listed below using two methods....

College Accounting, Chapters 1-27 (New in Accounting from Heintz and Parry)

The following is a list of 12 control plans from this chapter or from Chapters 8 through 12. Control Plans A. D...

Pkg Acc Infor Systems MS VISIO CD

Angus the sheep farmer sells wool to Barnaby the knitter for 20. Barnaby makes two sweaters, each of which has ...

Principles of Macroeconomics (MindTap Course List)

Income statement, retained earnings statement, and balance sheet The amounts of the assets and liabilities of G...

Survey of Accounting (Accounting I)

The following information pertains to a weekly payroll of Texera Tile Company: a. The total wages earned by emp...

PAYROLL ACCT.,2019 ED.(LL)-TEXT

Statement of cash flows A summary of cash flows for Paradise Travel Service for the year ended May 31, 2018, fo...

Corporate Financial Accounting

A rise in physical capital can raise Real GDP and lead to a rightward shift in the LRAS curve. Show this relati...

Economics (MindTap Course List)

What is a direct cost? An indirect cost?

Cornerstones of Cost Management (Cornerstones Series)

Which of the following is a criticism of capitalism? a. Unequal distribution of income b. Failure to protect th...

Economics For Today

Use the law of diminishing marginal utility to explain why demand curves slope downward.

Microeconomics

The city of Spring View is taking bids from six bus companies on the eight routes that must be driven in the su...

Practical Management Science

Select the correct word in parentheses. Despite the dangers, employees change their computer passwords (infrequ...

Bcom

Suppose the banking system has 40 billion in reserves. Also assume that there are no cash leakages or excess re...

Macroeconomics

Certain industries, such as the computer industry, are faced with constantly changing technologies, short produ...

Purchasing and Supply Chain Management

bartleby
© bartleby 2019