No Doubt Company includes 1 coupon in each box of soap der that it packs, and 10 coupons are redeemable for a premium (a kitchen utensi In 2017, No Doubt Company purchased 8,800 premiums at 80 cents and sold of powder at $3.30 per box, 44,000 coupons were presented for redemption in 2017. It is esti- mated that 60% of the coupons will eventually be presented for redemption. Instructions
Prepare all the entries that would be made relative to sales of soap powder and to the premium plan in 2017
Darshita Changed status to publish February 17, 2020
| Date | Description | Debit $ | Credit $ |
| 1 | Inventory – Premium | 7040 | |
| Cash | 7,824 | ||
| ((8800 Nos X $0.80) | |||
| (to record the payment of inventory premium paymen) | |||
| 2 | Cash | 363000 | |
| Sales | 363000 | ||
| (11000 Boxes X $3.30) | |||
| (to record the sales) | |||
| 3 | Premium Exp. | 3520 | |
| Inventory – Premiums | 3520 | ||
| 44000 /10 Coupons X.80 = $3520) | |||
| (to record the premium Expanses) | |||
| 4 | Premium Exp. Dr. | 1760 | |
| Estimated Liability – Premium | 1760 | ||
| ((110000 Coupons X 60%) – 4400)/10X $0.80 |
Darshita Changed status to publish February 17, 2020
