During 2020, ABC Company sold 500,000 boxes of brownies mix under a new sales promotional program. Each box contains one coupon, which when submitted with P40 entitles the customer a roll of baking sheet paper. ABC pays P50 per pan and P5 for handling and shipping. ABC estimates that 80% of the coupon will be redeemed, even though only 300,000 coupons have been processed during the year. What amount should ABC report as liability for unredeemed coupons as of December 31, 2020? To input answers, kindly follow the sample format below(no peso sign, with comma, no space):
Q: Phoenix Company, places a coupon in each box of its product. Customers may send in ten coupons and…
A: Outstanding Liability can be calculated by deducting actual coupon cost from Premium expense.…
Q: On May 1, 2021, Meta Computer, Inc., enters into a contract to sell 4,100 units of Comfort Office…
A: We can find two performance obligations in this contract, they are as follows: key board customer…
Q: During 2020, ABC Company signed a non-cancelable contract with XYZ Company to purchase 5,000 units…
A: It is a commitment made by the buyer to seller that the purchase of goods at the agreed price…
Q: Swifty Frosted Flakes Company offers its customers a pottery cereal bowl if they send in 3 boxtops…
A: Premium (Gift) means the product given free of cost to the customer on fulfilling the certain…
Q: Lex Company offers its customers a pottery cereal bowl if they send in 3 boxtops from Cute Company…
A: % of boxtops that will be redeemed = 60% on sales of 675,000 boxtops = 6,75,000×60% = 405000 boxes
Q: Edmonds Company includes 1 coupon in each box of soap powder that it packs, and 5 coupons are…
A: Record the purchase of premiums.
Q: No Doubt Company includes one coupon in each box of soap powder that it packs, and 10 coupons are…
A:
Q: At the beginning of the current year, Clan Company offers the customers a pottery bowl if they send…
A: Liability represents the obligation that has to be paid by the company by sacrificing the assets of…
Q: Hard Company placed orders to DIFFICULT for the year 2021 that will result to the following amount…
A: First Quarter Details: Tax rate = 32% Sales = P13,000,000 Rebate = 10% * 1,100,000 = P110,000 Cost…
Q: SUGA Company sold 485,000 boxes
A: Accounting treatment of Coupon / Premium Most of the business promote the coupon / premium to their…
Q: Tamarisk Company includes one coupon in each box of soap powder that it packs, and 10 coupons are…
A: Journal entry is the entry which is recorded at the time when a business transaction takes place and…
Q: ugust, 2019, HBO consigned to GEO 10 laptops costing P15,000 each, paying freight charge of P15,000.…
A: Net Income: Net income is the excess amount of revenue that arises after deducting all the expenses…
Q: In packages of its products, Kristine Company includes coupons that may be presented at retail…
A: Liabilities are classified as: Current liabilities Non-Current liabilities Current Liabilities-…
Q: In 2021, ABC Company issued 5,000 premiums coupons that can be redeemed for prizes. Each coupon if…
A: Estimated liability at year end shall be towards coupons left to be redeemed. Out of 5000 premium…
Q: During 2021, SUGA Company sold 485,000 boxes of cereals under a new sales promotional program. Each…
A: Accounting treatment of Coupon / Premium Most of the business promote the coupon / premium to their…
Q: During 2020, ABC Company signed a non-cancelable contract with XYZ Company to purchase 5,000 units…
A: Non-Cancelable Purchase Contract: A promise to buy a particular number of things later on at a fixed…
Q: On October 2, 2020, Ivanhoe Company sold $5,630 of its elite camping gear (with a cost of $3,320) to…
A: Sales Agreement: An contract of sale specifies the terms and conditions under which the seller will…
Q: In December 2021, Texan Company began including one coupon in each package of candy that it sells…
A: A debt or obligation of an unspecified amount which can be reasonably approximated is referred to as…
Q: Ben and Co. inaugurated a sales promotion campaign on May 31, 2019, whereby Ben placed a coupon in…
A: Number of redeemable coupon for chocolates sold = 400,000×60% = 240000 redeemable coupons Balance…
Q: Company sold 80,000 sold reversible shirts under a new sales promotional program during the year.…
A: Estimated number of unreedemed coupons = (total number of units sold x estimated percentage of…
Q: GoodBuy sells gift cards redeemable for GoodBuy products either in store or online. During 2021,…
A: Revenue: Revenue refers to the income received from the business activity or sale of the output,…
Q: During 2020, BIOT Company signed a non-cancelable contract with BTS Company to purchase 5,000 units…
A: Formula: Loss on purchase = contract signed price - decrease in price.
Q: During 2021, Thurs Company offered a P30 cash rebate coupon to customers who purchased one of its…
A: Thurs Company offered a P30 cash rebate coupon to customers who purchased one of its new lines of…
Q: During 2020, ABC Company signed a non-cancelable contract with XYZ Company to purchase 5,000 units…
A: The Contract to purchase 5000 units were made at a price of P1500 per unit delivery to be made in…
Q: During 2019, R Corp., a manufacturer of chocolate candies, contracted to purchase 100,000 pounds of…
A: Loss on purchase commitment = (contracted price - new price) x purchase in pounds = (1 - 0.80) x…
Q: Palmer Frosted Flakes Company offers its customers a pottery cereal bowl if they send in 3 boxtops…
A: Sometimes, customers are provided with offer of sending empty boxes to the company and in return…
Q: James Company has an arrangement with with Jorge Company that operates a customer loyalty program.…
A: Customer loyalty programs are accounted for as per IFRS 15. Such a program is used by a company to…
Q: whereby a customer who purchases three boxes of chocolates at P200 per box in a single transaction…
A: A.4,000,000 B.7,20,000 3x +.75x =60,000 x = 16,000 So .75 x 16,000 = 12,000 ×200
Q: The Moustache Company is replacing most of the windows in its Alden factory by purchasing them under…
A: Interest expense for 2019 = face value of notes x rate of interest x period = $37,908,000 x 10% =…
Q: On September 1, 2021, Laguna Grill determined that it will need to purchase 100,000 kilos of tuna…
A: A forward contract means the contract which is used to protect against the price increase in the…
Q: What is the total face amount of coupons issued by JENNIE Inc. in 2021? In packages of its…
A: solution : given : reimbursement to retailers = face amount + 10 % of face amount total…
Q: During 2021, SUGA Company sold 485,000 boxes of cereals under a new sales promotional program. Each…
A: Premium expense refers to the expense of the insurance benefit incurred by the candidate as a part…
Q: XYZ Co. includes one coupon in each bag of cat food it sells. In return for 4 coupons, customers…
A: Organizations sometimes offer coupons to the customers to be redeemed on a certain specific quantity…
Q: During 2020, Gray Company sold 500,000 boxes of cake mix under a new sales promotional program.…
A: Requirement 1: The calculation of premium expenses is as follows: The resultant table is as…
Q: luna Company sold 700,000 boxes of “puto” mix under a new sales promotional program. Each box…
A: Liability is the obligation for the owner of the entity in which certain amounts are to be paid back…
Q: Marigold Company includes one coupon in each box of soap powder that it packs, and 10 coupons are…
A: A journal entry is a form of accounting entry that is used to report a business transaction in a…
Q: PROBLEM 2 During 2020, ABC Co. sold 100,000 boxes of cake mix under a new sales promotional program.…
A: Liability means the amount which is to be paid to an outsider by business. It is the present…
Q: In December 2021, Texan Company began including one coupon in each package of candy that it sells…
A: The estimated liability for coupons will be the estimated net cost of toys to be given on exchange…
Q: During 1998, Day Company sold 500,000 boxes of cake mix under a new sales promotional program. Each…
A: Cost per coupon = Cost of pan + handling and shipping charges = P5 + 0.50 = P5.50
Q: During 2020, Day Company sold 500,000 boxes of cake mix under a new sales promotional program. Each…
A: Premium (Gift) means the product given free of cost to the customer on fulfilling the certain…
Q: During 1998, Day Company sold 500,000 boxes of cake mix under a new sales promotional program. Each…
A: Liability means the amount which is to be paid to an outsider by business. Liability for unredeemed…
Q: During 2020, ABC Company signed a non-cancelable contract with XYZ Company to purchase 5,000 units…
A: Formula: Amount of loss on purchase commitments = Contract signed price - Price fallen
Q: During 2020, ABC Company signed a non-cancelable contract with XYZ Company to purchase 5,000 units…
A: On entering into non cancellable contracts, the title of goods is transferred as and when the…
Q: On August, 2019, HBO consigned to GEO 10 laptops costing P15,000 each, paying freight charge of…
A: Consignment accounting refers to the accounting for goods sent to the consignee and other…
Q: Phoenix Company, places a coupon in each box of its product. Customers may send in ten coupons and…
A: Expenses means the amount spent on running the business where as income means the amount earned…
Q: On October 2, 2020, Laplante Company sold $6,000 of its elite camping gear (with a cost of $3,600)…
A: a. Prepare journal entries for Laplante to record (1) the sale on October 2, 2020, (2) the granting…
Q: On May 1, 2021, Meta Computer Inc, enters into a contract to sell 6.300 units of Comfort Office…
A: Introduction: A journal entry is a record of a commercial transaction in a company's accounting…
Q: Arianne Company, a grocery retailer, operates a customer loyalty program. The entity grants program…
A: ●1 Answer Option d:6,650,000 Explanation: Computation of sales revenue: Particulars Amount(P)…
Q: On August, 2019, HBO consigned to GEO 10 laptops costing P15,000 each, paying freight charge of…
A: Cost of Goods Sold is the cost of producing the goods, and it consists of direct materials, direct…
12
Step by step
Solved in 2 steps
- During 2020, STU Company sold 500,000 boxes of brownies mix under a new sales promotional program. Each box contains one coupon, which when submitted with P40 entitles the customer a roll of baking sheet paper . ABC pays P50 per pan and P5 for handling and shipping. ABC estimates that 80% of the coupon will be redeemed, even though only 300,000 coupons have been processed during the year. What amount should ABC report as liability for unredeemed coupons as of December 31, 2020?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?During 2021, Truffle Company sold 500,000 boxes of hotcakes under a new sales promotional program. Each box contains one coupon, which when submitted with P16, entitles the customer to a baking pan. Truffle pays P20 per pan and P2 for handling and shipping. Truffle estimate that 80% of the coupons will be redeemed, even though only 300,000 coupons had been processed during 2021. What amount should Truffle report as a liability for unredeemed coupons at December 31, 2021?
- Cullumber Bakery began selling gift cards in 2025. Based on industry norms, they expect that 40% of the gift cards will not be redeemed. In 2025, the bakery sold gift cards with a value of $1000. During that period, gift cards with a value of $250 were redeemed. The amount of revenue that Cullumber will recognize in 2025 with regard to the gift cards isDuring 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. 5,000,000Star Company is offering a promotion whereby a customer who purchases three boxes of chocolates at P200 per box in a single transaction receives a coupon for one free box of chocolates if the customer fills out a request form and mails it before a set expiration date. It is expected that 75% of the coupons will be redeemed.During 2021, the entity sold 60,000 boxes of chocolates at P200 per box or P12,000,000. During 2022, the entity delivered 12,000 additional free boxes of chocolates to the customers.A. What amount should be reported as stand-alone selling price of the free product coupons? 1,500,000 4,000,000 1,000,000 3,000,000 B. What amount should be reported as sales revenue from the delivery of free products in 2022? 1,800,000 1,440,000 1,200,000 720,000 C. What amount should be reported as sales revenue in 2021? 12,000,000 6,000,000 4,800,000 9,600,000
- luna Company sold 700,000 boxes of “puto” mix under a new sales promotional program. Each box contains one coupon, which if submitted with P40, entitles the customer to a kitchen knife. The company pays P60 per knife and P5 for handling and shipping. It estimates that 70% of the coupons will be redeemed, even though only 250,000 coupons had been processed during 2020. How much should luna report as liability for unredeemed coupons at December 31, 2020?Crane Bakery began selling gift cards in 2025. Based on industry norms, they expect that 30% of the gift cards will not be redeemed. In 2025, the bakery sold gift cards with a value of $2000. During that period, gift cards with a value of $500 were redeemed. The amount of revenue that Crane will recognize in 2025 with regard to the gift cards is O $650 O $500 O $2000 O $714During 2020, Maine Company Sold 50,000 boxes of hotcakes under a new sales promotional program. Each box contains one coupon, which when submitted with P 16, entitles the customer to a banking pan. Maine Co. pay P 20 per pan and P 2 handling and shipping. Maine estimates that 80% of the coupons will be redeemed, even though only 30,000 coupons had been processed during 2020. What amount should Maine report as a liability for unredeemed coupons at Dec. 31, 2020? * A.P 1,000,000 B.P 400,000 C.P 600,000 D.P 300,000
- During 2021, SUGA Company sold 485,000 boxes of cereals under a new sales promotional program. Each box contains one coupon, which entitles the customer to a premium that cost the company ₱75. Five coupons plus a remittance of ₱20 must be presented by the customer to receive a premium. SUGA estimated that 85% of the coupons will be redeemed. Actual premiums redeemed were 5,000 units. Additional information disclosed that ₱10 per premium is incurred for storage and distribution. REQUIRED: 1. Compute for the liability for the unredeemed coupons. 2. Compute for the premium expense for the year.During 2021, SUGA Company sold 485,000 boxes of cereals under a new sales promotional program. Each box contains one coupon, which entitles the customer to a premium that cost the company ₱75. Five coupons plus a remittance of ₱20 must be presented by the customer to receive a premium. SUGA estimated that 85% of the coupons will be redeemed. Actual premiums redeemed were 5,000 units. Additional information disclosed that ₱10 per premium is incurred for storage and distribution. Compute for the liability for the unredeemed coupons.During 2021, SUGA Company sold 485,000 boxes of cereals under a new sales promotional program. Each box contains one coupon, which entitles the customer to a premium that cost the company ₱75. Five coupons plus a remittance of ₱20 must be presented by the customer to receive a premium. SUGA estimated that 85% of the coupons will be redeemed. Actual premiums redeemed were 5,000 units. Additional information disclosed that ₱10 per premium is incurred for storage and distribution. Compute for the premium expense for the year.