Question

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 cash.)

		2020		2021
MP3 codes purchased		250,000		330,000
Candy bars sold		2,895,400		2,743,600
Wrappers redeemed		1,200,000		1,500,000
2020 wrappers expected to be redeemed in 2021		290,000
2021 wrappers expected to be redeemed in 2022				350,000

(a)

Partially correct answer iconYour answer is partially correct.

Prepare the journal entries that should be made in 2020 and 2021 to record the transactions related to the premium plan of the Sycamore Candy. (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.)

Answer 1

Answer:

In 2020 S.No Debit (1) Credit (6) wooking Particulars Inventory of Premium cash Cash 562,500 250000 X2:25 CDS 562,500 866.6LO 2895400 x 0.30 Sales Revenue P68, 620 Cash 4780000 Premium (12000nd/s)*(2.50-osd CI2000/)x(2.25+ 050-22) 600vo Expense : Inventory Premium SLOovo (12cctuels)2.25 14500 Premium Expenses Premium Ljubility 14500 |(29000015) (2.25 +0.50 -2.50) In 2021 Sno Credit (8) Working E Particulan . Inventory Premium CDI Cash Debit (& 742500 (330000 x 2.25) 742500 Cash 322080 (2743600 x 6-30) Sales Revenue 823080 боо ль 3: Cash Premium capitit Premium Expense Inventing Premium (P 14500 Gosoo (1500o /s)x(250-0.50) (1500 ouds)x(2.2570 som -2.50-lusto (15mwools)* 2.25 675ooo