During 2020, Maine Company Sold 50,000 boxes of hotcakes under a new sales promotional program. Each box contains one coupon, which when submitted with P 16, entitles the customer to a banking pan. Maine Co. pay P 20 per pan and P 2 handling and shipping. Maine estimates that 80% of the coupons will be redeemed, even though only 30,000 coupons had been processed during 2020. What amount should Maine report as a liability for unredeemed coupons at Dec. 31, 2020? * A.P 1,000,000 B.P 400,000 C.P 600,000 D.P 300,000

During 2020, Maine Company Sold 50,000 boxes of hotcakes under a new sales promotional program. Each box contains one coupon, which when submitted with P 16, entitles the customer to a banking pan. Maine Co. pay P 20 per pan and P 2 handling and shipping. Maine estimates that 80% of the coupons will be redeemed, even though only 30,000 coupons had been processed during 2020. What amount should Maine report as a liability for unredeemed coupons at Dec. 31, 2020? * A.P 1,000,000 B.P 400,000 C.P 600,000 D.P 300,000

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter17: Advanced Issues In Revenue Recognition

Section: Chapter Questions

Problem 6MC

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During 2020, Gray Company sold 500,000 boxes of cake mix under a new sales promotional program. Each box contained one coupon, which entitled the customer to a baking pan upon remittance of P40. The entity paid P50 per pan and P5 for handling and shipping. The entity estimated that 80% of the coupons will be redeemed, even though only 300,000 coupons had been processed during 2020. 2a. What amount should be reported as premium expense for 2020? a. P 2,000,000 b. P 4,500,000 c. P 6,000,000 d. P 7,500,000 2b. What amount should be reported as liability for unredeemed coupons on December 31, 2020? a. 1,000,000 b. 1,500,000 c. 3,000,000 d. 5,000,000
During 2020, STU Company sold 500,000 boxes of brownies mix under a new sales promotional program. Each box contains one coupon, which when submitted with P40 entitles the customer a roll of baking sheet paper . ABC pays P50 per pan and P5 for handling and shipping. ABC estimates that 80% of the coupon will be redeemed, even though only 300,000 coupons have been processed during the year. What amount should ABC report as liability for unredeemed coupons as of December 31, 2020?
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Riverbed Company sells goods to Danone Inc. by accepting a note receivable on January 2, 2020. The goods have a sales price of $630,700 (cost of $500,000). The terms are net 30. If Danone pays within 5 days, however, it receives a cash discount of $10,700. Past history indicates that the cash discount will be taken. On January 28, 2020, Danone makes payment to Riverbed for the full sales price. (a)Prepare the journal entry(ies) to record the sale and related cost of goods sold for Riverbed Company on January 2, 2020, and the payment on January 28, 2020. Assume that Riverbed Company records the January 2, 2020, transaction using the net method. (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.) Date Account Titles and Explanation Debit Credit Choose date Jan 2 or Jan 28…
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