ABC Co. distributed coupons to promote new products. The entity mailed 100,000 coupons for P45 off each box of cereal purchased on October 1, 2019. The entity expected 12,000 of these coupons to be redeemed before the December 31, 2019 expiration date. It takes 30 days from the redemption date for the entity to receive the coupons from the retailers. The entity reimbursed the retailers an additional P5 for each coupon redeemed. The entity had paid retailers P250,000 related to these coupons and had 5,000 coupons on hand had not been processed for payment. What amount should be reported as liability for coupons on December 31, 2019? A) 250,000 B) 225,000 290,000 350,000

ABC Co. distributed coupons to promote new products. The entity mailed 100,000 coupons for P45 off each box of cereal purchased on October 1, 2019. The entity expected 12,000 of these coupons to be redeemed before the December 31, 2019 expiration date. It takes 30 days from the redemption date for the entity to receive the coupons from the retailers. The entity reimbursed the retailers an additional P5 for each coupon redeemed. The entity had paid retailers P250,000 related to these coupons and had 5,000 coupons on hand had not been processed for payment. What amount should be reported as liability for coupons on December 31, 2019? A) 250,000 B) 225,000 290,000 350,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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What is the total face amount of coupons issued by JENNIE Inc. in 2021? In packages of its products, JENNIE Inc. includes coupons that may be presented at retail stores to obtain discounts on other JENNIE products. Retailers are reimbursed for the face amount of coupons redeemed plus 10% of that amount for handling costs. JENNIE honors requests for coupon redemption by retailers up to 3 months after the consumer expiration date. JENNIE estimates that 60% of all coupons issued will ultimately be redeemed. Information relating to coupons issued by JENNIE during 2021 is as follows: Consumer expiration date - December 31, 2021; Total payments to retailers as of December 31, 2021 - ₱165,000; Liability for unredeemed coupons as of December 31, 2021 - ₱99,000. a.) ₱ 440,000 b.) ₱ 400,000 c.) ₱ 600,000 d.) ₱ 264,000
During 2020, Day Company sold 500,000 boxes of cake mix under a new sales promotional program. Each box contained one coupon, which entitled the customer to a baking pan upon remittance of P40. The entity paid P50 per pan and P5 for handling and shipping. The entity estimated that 80% of the coupons will be redeemed, even though only P300,000 coupons had been processed during 2020. 1. What amount should be reported as premium expense for P2020? 2. What amount should be reported as liability for unredeemed coupons on December 31, 2020?
Ben and Co. inaugurated a sales promotion campaign on May 31, 2019, whereby Ben placed a coupon in each package of chocolate sold, the coupons being redeemable for a premium. Each premium costs Ben P 50 and a customer to receive a coupon must present five coupons. Ben estimated that only 60 % of the coupon issued would be redeemed. For the seven months ended Dec. 3, 2019, the following information is available: Packages of chocolates sold 400,000 Premium purchased 30,000 Coupons redeemed 100,000 How much is the estimated liability for premium claims outstanding at Dec. 31, 2019? * A.P 180,000 B.P 140,000 C.P 240,000 D.P 100,000
During 2020, Gray Company sold 500,000 boxes of cake mix under a new sales promotional program. Each box contained one coupon, which entitled the customer to a baking pan upon remittance of P40. The entity paid P50 per pan and P5 for handling and shipping. The entity estimated that 80% of the coupons will be redeemed, even though only 300,000 coupons had been processed during 2020. 2a. What amount should be reported as premium expense for 2020? a. P 2,000,000 b. P 4,500,000 c. P 6,000,000 d. P 7,500,000 2b. What amount should be reported as liability for unredeemed coupons on December 31, 2020? a. 1,000,000 b. 1,500,000 c. 3,000,000 d. 5,000,000
In packages of its products, Rolex Company includes coupons that may be presented at retail stores to obtain discounts on various products. Retailers are reimbursed for the face amount of coupons redeemed plus 15% of that amount for handling cost. The Company honors requests for coupon redemption by retailers up to 5 months after the consumer expiration date. The Company estimates that 50% of all coupons issued will ultimately be redeemed. Information relating to coupons issued by the Company during 2022 is as follows: Liability for unredeemed coupons as of 12/31/2022 P237,500 Total payments to retailers as of 12/31/2022 P165,000 Q4 – What is the amount of estimated premium liability at the setup date? Q5 – What is the amount of handling charges? Q6 – What is the face amount of coupons issued by Rolex Company?
MOA sells gift cards that are redeemable only at its stores. The company's policy is to record the redemption amount as realized. MOA sold P1,800,000 worth of gift certificates in 2019 and redeemed P1,560,000 worth of gift certificates. The value of outstanding gift certificates as of January 1, 2019 is P520,000. The company's gross profit margin is 40%. What is the obligation for outstanding gift cards at the end of the fiscal year on December 31, 2019?
In packages of its products, JENNIE Inc. includes coupons that may be presented at retail stores to obtain discounts on other JENNIE products. Retailers are reimbursed for the face amount of coupons redeemed plus 10% of that amount for handling costs. JENNIE honors requests for coupon redemption by retailers up to 3 months after the consumer expiration date. JENNIE estimates that 60% of all coupons issued will ultimately be redeemed. Information relating to coupons issued by JENNIE during 2021 is as follows: Consumer expiration date - December 31, 2021; Total payments to retailers as of December 31, 2021 - ₱165,000; Liability for unredeemed coupons as of December 31, 2021 - ₱99,000. What is the total face amount of coupons issued by JENNIE Inc. in 2021? ₱ 440,000 ₱ 400,000 ₱ 264,000 ₱ 600,000
In packages of its products, PLACID, INC. includes coupons that may be presented at retail stores to obtain discounts on other Placid products. Retailers are reimbursed for the face amount of coupons redeemed plus 10% of that amount for handling costs. Placid honors requests for coupon redemption by retailers up to 3 months after the consumer expiration date. Placid estimates that 60% of all coupons issued will ultimately be redeemed. Information relating to coupons issued by Placid during 2020 as follows: Consumer expiration date December 31, 2020 Total payments to retailers as of December 31, 2020 Php 165,000 Liability for unredeemed coupons as of December 31, 2020 Php 99,000 Required: 2. What is the total face amount of coupons issued by Placid, Inc. in 2020?
In packages of its products, Yolo Company includes coupons that may be presented at retail stores to obtain discounts on other Yolo Company products. Retailers are reimbursed for the face amount of coupons plus 20% of that amount for handling costs.Yolo honors requests for coupon redemption by retailers up to three months after the consumer expiration date. Yolo estimatesthat 80% of all coupons issued will ultimately be redeemed. Information relating to coupons issued by Yolo during 2019 is asfollows:Consumer expiration date December 31, 2019Total face amount of coupons issued P7,500,000Total payments to retailers as of December 31, 2019 P5,400,000What amount should Yolo report as a liability for unredeemed coupons at December 31, 2019?
In packages of its products, Kristine Company includes coupons that may be presented at retail stores to obtain discounts on other Kristine Company products. Retailers are reimbursed for the face amount of coupons plus 20% of that amount for handling costs. Kristine honors requests for coupon redemption by retailers up to three months after the consumer expiration date. Kristine estimates that 80% of all coupons issued will ultimately be redeemed. Information relating to coupons issued by Kristine during 2020 is as follows: Consumer expiration date December 31, 2020 Total face amount of coupons issued 5,000,000 Total payments to retailers as of December 31, 2020 3,600,000 What amount should Kristine report as a liability for unredeemed coupons at December 31, 2020? Group of answer choices A. 400,000 B. 2,400,000 C. 1,200,000 D. 1,400,000
Familiar Company operates a customer loyalty program. The entity grants loyalty points for goods purchased. The loyalty points can be used by the customers in exchange for goods of the entity. The points have no expiry date. During 2019, the entity issued 450,000 award credits and expects that 40% of these award credits shall be redeemed. The total stand-alone selling price of the award credits granted is measured reliably at P9,000,000. In 2019, the entity sold goods to customers for a total consideration of P36,000,0000 based on a stand-alone selling price. The award credits redeemed and the total award credits expected to be redeemed each year are as follows: Redeemed Expected to be redeemed 2019 135,000 40% 2020 67,500 45% What is the revenue from points for 2019? P1,350,000 P3,600,000 P1,080,000 P3,375,000 What is the revenue from points for 2020?…
In packages of its products, CUTE COMPANY includes coupons that may be presented at retail stores to obtain discounts on other CUTE COMPANY products. Retailers are reimbursed for the face amount of coupons redeemed plus 10% of that amount for handling costs. CUTE COMPANY honors requests for coupon redemption by retailers up to 3 months after the consumer expiration date. CUTE COMPANY estimates that 60% of all coupons issued will ultimately be redeemed. Information relating to coupons issued by CUTE COMPANY during 2021 is as follows: Consumer expiration date - December 31, 2021; Total payments to retailers as of December 31, 2021 - ₱165,000; Liability for unredeemed coupons as of December 31, 2021 - ₱99,000. What is the total face amount of coupons issued by CUTE COMPANY Inc. in 2021? A. ₱ 264,000 B. ₱ 400,000 C. ₱ 600,000 D. ₱ 440,000