To stimulate the sales of its Alladin breakfast cereal, Sandhill Company places 1 coupon in each box. 5 coupons are redeemable for a premium consisting of a children's hand puppet. In 2021, the company purchases 46,100 puppets at $1.65 each and sells 440,000 boxes of Alladin at $3.90 a box. From its experience with other similar premium offers, the company estimates that 40% of the coupons issued will be mailed back for redemption. During 2021, 121,000 coupons are presented for redemption. Prepare the journal entries that should be recorded in 2021 relative to the premium plan. (If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. Round answers to O decimal places, e.g. 1.525.)
To stimulate the sales of its Alladin breakfast cereal, Sandhill Company places 1 coupon in each box. 5 coupons are redeemable for a premium consisting of a children's hand puppet. In 2021, the company purchases 46,100 puppets at $1.65 each and sells 440,000 boxes of Alladin at $3.90 a box. From its experience with other similar premium offers, the company estimates that 40% of the coupons issued will be mailed back for redemption. During 2021, 121,000 coupons are presented for redemption. Prepare the journal entries that should be recorded in 2021 relative to the premium plan. (If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. Round answers to O decimal places, e.g. 1.525.)
Chapter10: Financial Statements And Reports
Section: Chapter Questions
Problem 4.7C
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Question
Transcribed Image Text:Prepare the journal entries that should be recorded in 2021 relative to the premium plan. (If no entry is required, select "No Entry" for the
account titles and enter o for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.
Round answers to O decimal places, e.g. 1,525.)
Account Titles and Explanation
(To record the premium inventory.)
(To record the sales.)
(To record the expense associated with the sale.)
(To record the premium liability.)
Debit
|||||
Credit
IN TO DO
Transcribed Image Text:To stimulate the sales of its Alladin breakfast cereal, Sandhill Company places 1 coupon in each box. 5 coupons are redeemable for a
premium consisting of a children's hand puppet. In 2021, the company purchases 46,100 puppets at $1.65 each and
sells 440,000 boxes of Alladin at $3.90 a box. From its experience with other similar premium offers, the company estimates that 40%
of the coupons issued will be mailed back for redemption. During 2021, 121,000 coupons are presented for redemption.
Prepare the journal entries that should be recorded in 2021 relative to the premium plan. (If no entry is required, select "No Entry" for the
account titles and enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.
Round answers to O decimal places, e.g. 1,525.)
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