Question

each and sold 107,000 boxes of soap powder at $3.20 per box; 46,700 coupons were presented for redemption in 2017. It is estimated that 60% of the coupons will eventually be presented for redemption. Prepare all the entries that would be made relative to sales of soap powder and to the premium plan in 2017. (If no entry is required, select "No Entry" for the account titles and enter 0 for the Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Answer 1

Account Titles and Explanation	Debit	Credit
Inventory Premiums (8400 X 0.80)	6,720
Cash		6,720
(To record the premium inventory)
Cash (107000 X $3.20)	3,42,400
Sales		3,42,400
(To record the sales)
Premium Expense (46700/10) X 0.80	3,736
Inventory Premiums		3,736
(To record the expense associated with sales)
Premium Expense [(107000 X 0.60) - 46700]/10 X 0.80	1,400
Estimated Liability Premiums		1,400
(To record the premium liability)