Question

Send to Gradebook < Prev 0.5/1 Question 5 View Policies Show Attempt History Current Attempt in Progress Sage Company offers an MP3 download (seven-single medley) as a premium for every 5 candy bar wrappers presented by customers together with $2.55. The candy bars are sold by the company to distributors for 30 cents each. The purchase price of each download code to the company is $2.30. In addition, it costs 50 cents to distribute each code. The results of the premium plan for the years 2017 and 2018 are as follows. (All purchases and sales are for cash.) MP3 codes purchased Candy bars sold Wrappers redeemed 2017 wrappers expected to be redeemed in 2018 2018 wrappers expected to be redeemed in 2019 2017 2018 255,000 336,600 3,147,300 2,880,400 1,224,000 1,530,000 295,800 357,000 Part 1 Your answer is correct.

Part 2 please, show work.

Answer 1

Account Inventory of Premiums Premium Liability Premium Expenses Amount 2017 23,460 14,790 75,990 2018 Classification 93,840 Current Assets 17,850 Current Liabilty 79,560 Selling Expense 2017 Working Notes Inventory of Premium Balance Opening Balance Add: Recording of Premium Liability Less: Expenses associated with sales Closing Balance 586,500 (563,040) 23,460 2018 23,460 774,180 (703,800) 93,840 Premium Liability Got the figures from the entry of recording the premium liability of that year. 2018 Premium Expense From to record expense From to record premium liability Total premium expense 2017 61,200 14,790 75,990 61,710 17,850 79,560