Question

Question 5 Shamrock offers an MP3 download (seven-single medley) as a premium for every 6 candy...

Question 5

Shamrock offers an MP3 download (seven-single medley) as a premium for every 6 candy bar wrappers presented by customers together with $2.65. 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 $2.40. In addition, it costs 50 cents to distribute each code. The results of the premium plan for the years 2020 and 2021 are as follows. (All purchases and sales are for cash.)

2020

2021

MP3 codes purchased 375,000 495,000
Candy bars sold 2,659,900 2,812,000
Wrappers redeemed 1,800,000 2,250,000
2020 wrappers expected to be redeemed in 2021 435,000
2021 wrappers expected to be redeemed in 2019 525,000
Prepare the journal entries that should be made in 2020 and 2021 to record the transactions related to the premium plan of the Shamrock. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. Round answers to 0 decimal places, e.g. 1,525.)

Account Titles and Explanation

Debit

Credit

2020

(To record the premium inventory.)

(To record the sales.)

(To record the expense associated with the sale.)

(To record the premium liability.)

2021

(To record the premium inventory.)

(To record the sales.)

(To record the expense associated with the sale.)

(To record the premium liability.)

SHOW LIST OF ACCOUNTS

Indicate the amounts for each accounts, and classifications of the items related to the premium plan that would appear on the balance sheet and the income statement at the end of 2020 and 2021.

Amount

Account

2020

2021

Classification

Inventory of Premiums $

$

Current LiabilityLong-term InvestmentsSelling ExpenseStockholders' EquityProperty, Plant and EquipmentCurrent Asset

Premium Liability

Current AssetSelling ExpenseProperty, Plant and EquipmentCurrent LiabilityLong-term InvestmentsStockholders' Equity

Premium Expense

0 0
Add a comment Improve this question Transcribed image text
Answer #1

Working Notes j. Computation of pemim Liability 9. Wrappers Redeemed 6. MP3 Codes Redeemed 19/6) F1 с. | РеМm Expease (6Х2.42. Computation of Premum Expelje 2020 2021 1 9 Wrappers Redeemed 16. MP3 Codes Redeemed (76) c. Promlum Expense (682.40) d. DAncora In the books of Shamrock . Journal Entrier for 2020 on 900000 9000 Invenbory Alc ( 375000 units X2-4) - To Cash Alon eIn the books of Shamrock Journal Enwies for 2017 - pr en 1 1188000 Inventory Al (495000 49/15 X 2.40 - To Cash A/C Co To reco1 Indication of amount of each accounts and classificat that would appear on Balance sheet 6 Income statement Classification

Add a comment
Know the answer?
Add Answer to:
Question 5 Shamrock offers an MP3 download (seven-single medley) as a premium for every 6 candy...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
  • Pharoah offers an MP3 download (seven-single medley) as a premium for every 6 candy bar wrappers...

    Pharoah offers an MP3 download (seven-single medley) as a premium for every 6 candy bar wrappers presented by customers together with $2.65. 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 $2.40. In addition, it costs 50 cents to distribute each code. The results of the premium plan for the years 2020 and 2021 are as follows. All purchases and sales are for cash.)...

  • Sycamore Candy offers an MP3 download (seven-single medley) as a premium for every 5 candy bar...

    Sycamore Candy offers an MP3 download (seven-single medley) as a premium for every 5 candy bar wrappers presented by customers together with $2.50. 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 $2.25. In addition, it costs 50 cents to distribute each code. The results of the premium plan for the years 2020 and 2021 are as follows. (All purchases and sales are for...

  • Cheyenne offers an MP3 download (seven-single medley) as a premium for every 6 candy bar wrappers...

    Cheyenne offers an MP3 download (seven-single medley) as a premium for every 6 candy bar wrappers presented by customers together with $2.60. 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 $2.35. In addition, it costs 50 cents to distribute each code. The results of the premium plan for the years 2020 and 2021 are as follows. (All purchases and sales are for cash.)...

  • Sarasota offers an MP3 download (seven-single medley) as a premium for every 5 candy bar wrappers...

    Sarasota offers an MP3 download (seven-single medley) as a premium for every 5 candy bar wrappers presented by customers together with $3.30. 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 $3.05. In addition, it costs 50 cents to distribute each code. The results of the premium plan for the years 2020 and 2021 are as follows. (All purchases and sales are for cash.)...

  • Sheffield offers an MP3 download (seven-single medley) as a premium for every 6 candy bar wrappers...

    Sheffield offers an MP3 download (seven-single medley) as a premium for every 6 candy bar wrappers presented by customers together with $2.60. 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 $2.35. In addition, it costs 50 cents to distribute each code. The results of the premium plan for the years 2020 and 2021 are as follows. (All purchases and sales are for cash.)...

  • Bonita Company offers an MP3 download (seven-single medley) as a premium for every 5 candy bar...

    Bonita Company offers an MP3 download (seven-single medley) as a premium for every 5 candy bar wrappers presented by customers together with S3.30. The candy bars are sold by the company to distributors for 30 cents each. The purchase price company is $3.05. 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.) of each download code to...

  • Sheffield offers an MP3 download (seven-single medley) as a premium for every 6 candy bar wrappers...

    Sheffield offers an MP3 download (seven-single medley) as a premium for every 6 candy bar wrappers presented by customers together with $2.60. 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 $2.35. In addition, it costs 50 cents to distribute each code. The results of the premium plan for the years 2020 and 2021 are as follows. (All purchases and sales are for cash.)...

  • Pharoah Company offers an MP3 download (seven-single medley) as a premium for every 5 candy bar...

    Pharoah 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...

  • Pina Company offers an MP3 download (seven-single medley) as a premium for every 6 candy bar...

    Pina Company offers an MP3 download (seven-single medley) as a premium for every 6 candy bar wrappers presented by customers together with $3.05. 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 $2.80. 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...

  • Pronghorn Company offers an MP3 download (seven-single medley) as a premium for every 5 candy bar...

    Pronghorn Company offers an MP3 download (seven-single medley) as a premium for every 5 candy bar wrappers presented by customers together with $2.70. 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 $2.45. 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...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT