Palmer Frosted Flakes Company offers its customers a pottery cereal bowl if they send in 3 boxtops from Palmer Frosted Flakes boxes and P2. The company estimates that 60% of the boxtops will be redeemed. In 2020, the company sold 675,000 boxes of Frosted Flakes and customers redeemed 330,000 boxtops receiving 110,000 bowls. If the bowls cost Palmer Company P6 each, how much liability for outstanding premiums should be recorded at the end of 2020? a. P540,000 c. P150,000 b. P100,000 d. P276,000

Palmer Frosted Flakes Company offers its customers a pottery cereal bowl if they send in 3 boxtops from Palmer Frosted Flakes boxes and P2. The company estimates that 60% of the boxtops will be redeemed. In 2020, the company sold 675,000 boxes of Frosted Flakes and customers redeemed 330,000 boxtops receiving 110,000 bowls. If the bowls cost Palmer Company P6 each, how much liability for outstanding premiums should be recorded at the end of 2020? a. P540,000 c. P150,000 b. P100,000 d. P276,000

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter17: Advanced Issues In Revenue Recognition

Section: Chapter Questions

Problem 6MC

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Fry Company offers its customers a pottery cereal bowl if they send in 3 boxtops from Fry boxes and P2. The company estimates that 60% of the boxtops will be redeemed. In 2020, the company sold 675,000 boxesof Fry and customers redeemed 330,000 boxtops receiving 110,000 bowls. If the bowls cost Fry Company P6each, how much liability for outstanding premiums should be recorded at the end of 2020?a. P540,000 c. P150,000b. P100,000 d. P276,000
Crane Frosted Flakes Company offers its customers a pottery cereal bowl if they send in 3 proof of purchase seals from Crane Frosted Flakes boxes and $1. The company estimates that 60% of the proof of purchase seals will be redeemed. In 2026, the company sold 1404000 boxes of Frosted Flakes, and customers redeemed 686400 proof of purchase seals receiving 228800 bowls. If the bowls cost Crane Company $3 each, how much liability for outstanding premiums should be recorded at the end of 2026? $104000 O $156000 $287040 O $561600
Swifty Frosted Flakes Company offers its customers a pottery cereal bowl if they send in 3 boxtops from Swifty Frosted Flakes boxes and $2. The company estimates that 60% of the boxtops will be redeemed. In 2021, the company sold 1355000 boxes of Frosted Flakes and customers redeemed 660000 boxtops receiving 220000 bowls. If the bowls cost Swifty Company $4 each, how much liability for outstanding premiums should be recorded at the end of 2021? O $542000 O $278000 O $102000 O $204000
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Kane Candy Company sells candy bars for $1 each. In addition, Kane offers its customers a coffee mug in exchange for $2 and 10 candy wrappers. A coffee mug costs Kane $2.40, and the company estimates that customers will redeem 60 percent of the candy wrappers. During 2020, Kane purchased 720,000 mugs, sold 5,600,000 candy bars, and redeemed 2,800,000 candy wrappers. Instructions: 1. Prepare the journal entry to record the purchase of the coffee mugs. 2. Prepare the entry to record the sale of the candy bars. 3. Prepare the entry to record the redemption of candy wrappers, the receipt of $2 per 10 wrappers, and the delivery of the coffee mugs. 4. Prepare the adjusting entry to record additional premium expense and the estimated premium liability at Dec. 31, 2020. L
LeMay Frosted Flakes Company offers its customers a pottery cereal bowl if they send in 4 boxtops from LeMay Frosted Flakes boxes and P1.00. The company estimates that 60% of the boxtops will be redeemed. In 2010, the company sold 500,000 boxes of Frosted Flakes and customers redeemed 220,000 boxtops receiving 55,000 bowls. If the bowls cost LeMay Company P2.50 each, how much liability for outstanding premiums should be recorded at the end of 2010? 70,000 70,000 20,000 20,000 50,000 50,000 30,000 30,000