Moon Company includes 1 coupon in each box of soap powder that it packs, 10 coupons being redeemable for a premium consisting of a kitchen utensil. In 2014, Moon Company purchased 36,000 premiums at $1.00 each and sold 540,000 boxes of soap powder at $4.00 per box. Based on past experience, it is estimated that 60% of the coupons will be redeemed. During 2014, 114,000 coupons were presented for redemption. During 2015, 29,000 premiums were purchased at $1.10. The company sold 1,200,000 boxes of soap at $4.00 and 495,000 coupons were presented for redemption. Instructions: Prepare all entries that would be made relative to sales of soap powder and to the premium plan in both 2014 and 2015. Assume a FIFO inventory flow.
Moon Company includes 1 coupon in each box of soap powder that it packs, 10 coupons being redeemable for a premium consisting of a kitchen utensil. In 2014, Moon Company purchased 36,000 premiums at $1.00 each and sold 540,000 boxes of soap powder at $4.00 per box. Based on past experience, it is estimated that 60% of the coupons will be redeemed. During 2014, 114,000 coupons were presented for redemption.
During 2015, 29,000 premiums were purchased at $1.10. The company sold 1,200,000 boxes of soap at $4.00 and 495,000 coupons were presented for redemption.
Instructions: Prepare all entries that would be made relative to sales of soap powder and to the premium plan in both 2014 and 2015. Assume a FIFO inventory flow.
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