Question

Ayayai Corp. offers a set of building blocks to customers who send in 3 codes from Ayayai cereal, along with $1.00. Ayayai purchased 99,000 building block sets in 2020 for $2.50 each, and paid for them by cash. During 2020, Ayayai sold 990,000 boxes of cereal for $4 per box. Ayayai estimates that 10% of the sales amount received from customers relates to the building block sets to be awarded. Ayayai expects 30% of the codes to be sent in, and in 2020, 237,600 codes were redeemed. Prepare all necessary journal entries for 2020 if Ayayai follows IFRS and prefers to use the revenue approach. (Round answers to 0 decimal places, e.g. 5,275. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Answer 1

Soph Debit Credit IFRS Account Tilles and fup. Torventoryey Premium (99000 x$2.5) Cash $247500 $ 247500 $ 3960000 Cash (990000X$4) $ 3564000 Sale Revenue $ 396000 unearned Premium Revenue (99000 0 x $ 4x107.) $ 79200 $1 Cash ( 237600X 3 $ 118000 Premium Exp $190000 Inventory ay Premiums (2376007825 ) $ 316800 uneared Premium Revenue $316 000 Sale Rovenue 237600/1990000X307.)X $ 396000