Question

Sage Company offers an MP3 downloade r med pe ry Scandy bar w ars presented by customers together with $255 The candybars are sold by the company to distributors for 30 cents each. The purchase price of exch download code to the company is 52 30. In addition tests Scents to distribute eachcode The results of the premium plan for the years 2017 and 2018 areas 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 2880.400 1,224,00 1530.000 295.000 357.000 Part 1 Precare the journal entries that should be made in 2017 and 2018 to record the transactions related to the premium plan of the Sage Company entry is select Ne Entry for the countries and enter for the amounts Credit accountries are automatically indeed when there Donation may Round answers to decimal places 1.525)

Answer 1

Part 1

No.	General Journal	Debit	Credit
2017
1	Inventory of Premiums (255000 x $2.30)	586500
	Cash		586500
	(To record the purchase of premium inventory)
2	Cash	944190
	Sales Revenue (3147300 x $0.30)		944190
	(To record the sales)
3	Cash [1224000/5 = 244800 x ($2.55 - $0.50)]	501840
	Premium Expense [244800 x ($2.30 + $0.50 - $2.55)]	61200
	Inventory of Premiums (244800 x $2.30)		563040
	(To record the wrappers redeemed)
4	Premium Expense	14790
	Premium Liability [295800/5 = 59160 x ($2.30 + $0.50 - $2.55)]		14790
	(To record the premium liability)
2018
1	Inventory of Premiums (336600 x $2.30)	774180
	Cash		774180
	(To record the purchase of premium inventory)
2	Cash	864120
	Sales Revenue (2880400 x $0.30)		864120
	(To record the sales)
3	Cash [1530000/5 = 306000 x ($2.55 - $0.50)]	627300
	Premium Liability	14790
	Premium Expense [(306000 - 59160) x ($2.30 + $0.50 - $2.55)]	61710
	Inventory of Premiums (306000 x $2.30)		703800
	(To record the wrappers redeemed)
4	Premium Expense	17850
	Premium Liability [357000/5 = 71400 x ($2.30 + $0.50 - $2.55)]		17850
	(To record the premium liability)