Mott Co. includes one coupon in each bag of dog food it sells. In return for eight coupons, customers receive a leash. The leashes cost Mott $2.00each. Mott estimates that 40 percent of the coupons will be redeemed. Data for 2010 and 2011 are as follows: 2010 2011 Bags of dog food sold 500,000600,000 Leashes purchased 18,000 22,000 Coupons redeemed 120,000 150,000
The estimated premium liability at December 31, 2011 is
{[(600,000 0.4) - 150,000] 8} $2 = $22,500. $22,500 + $20,000 = $42,500.
Sheffield Corp. includes one coupon in each bag of dog food it sells. In return for eight coupons, customers receive a leash. The leashes cost Sheffield $5 each. Sheffield estimates that 40 percent of the coupons will be redeemed. Data for 2020 and 2021 are as follows: 2020 2021 Bags of dog food sold 520000 580000 Leashes purchased 19000 21000 Coupons redeemed 110000 150000 The premium expense for 2020 is
1. Doaktown Products manufactures fishing equipment for recreational uses. The Miramichi plant produces the company’s two versions of a special reel used for river fishing. The two models are the M-008, a basic reel, and the M-123, a new and improved version. Cost accountants at company headquarters have prepared costs for the two reels for the most recent period. The plant manager is concerned. The cost report does not coincide with her intuition about the relative costs of the two...
Crane Co. includes one coupon in each bag of dog food it sells. In return for 4 coupons, customers receive a dog toy that the company purchases for $1.20 each. Crane's experience indicates that 60 percent of the coupons will be redeemed. During 2020, 102,000 bags of dog food were sold, 12,000 toys were purchased, and 40,800 coupons were redeemed. During 2021, 122,200 bags of dog food were sold, 16,695 toys were purchased, and 61,100 coupons were redeemed.Determine the premium expense to be reported in the income statement and the premium liability on the balance...
premium expense and liability VREUN Downloadable eTextbook CALCULATOR FULL SCREEN PRINTER VERSION BACK Exercise 152 Sterling Co. includes one coupon in each bag of dog food it sells. In return for 4 coupons, customers receive a dog toy that the company purchases for $1.40 each. Sterling's experience indicates that 60 percent of the coupons will be redeemed. During 2017, 101,000 bags of dog food were sold, 12,010 toys were purchased, and 40,400 coupons were redeemed. During 2018, 118,400 bags of...
Miller Company includes one coupon in each bag of dog food it sells. In return for $4 and 3 coupons, customers receive a dog toy. The dog toys cost Miller $20 each. During 2019, 3,000 coupons were redeemed. The entries to record the coupons redeemed in 2019 include a debit to Premium Expense for $20,000 $3,000 $4,000 $16,000
Answer parts A,B,C,D and E to receive full credit for #1:A. Becks company includes one coupon in each bag of cat food it sells. In return for 15 coupons and 25 cents, customers recieve a leash. the leashes cost the compny $4.50 each. Beck estimates that 40% of the coupons will be redeemed. Data for 2019 are as follows:2019bags of cat food sold1,650,000coupons redeemed225,000Beck does not make any coupon expense entries at the time of sale. rather, it recognizes coupon...
The Happy Cereal Company includes a premium in each box of its cereal. For four premiums plus $2.00, customers are entitled to a plastic wiggle worm that costs Happy $4.50 each. Happy expects 60% of the premiums to be redeemed. In 2016, Happy sold 500,000 boxes of cereal and distributed 25,000 wiggle worms. Refer to Exhibit 9-1. What is Happy's estimated liability for unredeemed premiums on December 31, 2016? the answer is 125,000 I just need help figuring out how...
Shuck Co includes 1 coupon in each box of cereal that it packs and 10 coupons are redeemable for a premium. In 2010, Shuck purchased 9,000 premiums at $.90 each and sold 100,000 boxes of cereal at $2.00 per box; 40,000 coupons were presented for redemption in 2010. It is estimated that 60% of the coupons will eventually be presented for redemption. Prepare 2010 entries.
(Warranties and Premiums) WXZ Pools carries a wide variety of residential quality outdoor swimming pools and supplies to maintain the pools. WXZ uses two sales promotion techniques—warranties and premiums—to attract and retain customers. Swimming pools are sold with a two-year warranty for replacement of parts and labor. The estimated warranty cost, based on past experience, is 6% of sales. The premium is offered on the purchases of chemical supplies to maintain the pool. Customers receive a coupon for each dollar...
Waterway Music Emporium carries a wide variety of musical instruments, sound reproduction equipment, recorded music, and sheet music. Waterway uses two sales promotion techniques—warranties and premiums—to attract customers. Musical instruments and sound equipment are sold with a 1-year warranty for replacement of parts and labor. The estimated warranty cost, based on past experience, is 1% of sales. The premium is offered on the recorded and sheet music. Customers receive a coupon for each dollar spent on recorded music or sheet...