Kollegg Canada makes and sells a breakfast cereal called Super Wheat Crunch. As a promotion, Kollegg...
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Kollegg Canada makes and sells a breakfast cereal called Super Wheat Crunch. As a promotion, Kollegg offered its customers a free music CD in exchange for cereal boxtops, plus money to cover postage and handling. Kollegg has a December 31 year end. Kollegg follows ASPE and uses the expense approach to account for its premiums. Other information pertaining to the cereal promotion, which started on November 1, 2020 and ended on February 28, 2021, follows: Number of boxtops to be remitted by customers to receive a free CD Amount of cash to be remitted by each customer to receive a free CD Cost of each CD to Kollegg 3.45 3.52 Postage cost to mail each CD to customer Estimated percentage of boxtops that would be redeemed Number of CDs purchased by Kollegg on October 1, 2020 $ 2.63 70% 23,088 Number of boxes of cereal sold in November and December 2020 112,392 Selling price for each box of cereal Number of boxtops redeemed on or prior to December 31, 2020 8 30,714 Required: Prepare all journal entries that should be made in 2020 related to the premium plan. Assume that all CDs are purchased with cash, and that cash is received immediately for all sales. %24 Kollegg Canada makes and sells a breakfast cereal called Super Wheat Crunch. As a promotion, Kollegg offered its customers a free music CD in exchange for cereal boxtops, plus money to cover postage and handling. Kollegg has a December 31 year end. Kollegg follows ASPE and uses the expense approach to account for its premiums. Other information pertaining to the cereal promotion, which started on November 1, 2020 and ended on February 28, 2021, follows: Number of boxtops to be remitted by customers to receive a free CD Amount of cash to be remitted by each customer to receive a free CD Cost of each CD to Kollegg 3.45 3.52 Postage cost to mail each CD to customer Estimated percentage of boxtops that would be redeemed Number of CDs purchased by Kollegg on October 1, 2020 $ 2.63 70% 23,088 Number of boxes of cereal sold in November and December 2020 112,392 Selling price for each box of cereal Number of boxtops redeemed on or prior to December 31, 2020 8 30,714 Required: Prepare all journal entries that should be made in 2020 related to the premium plan. Assume that all CDs are purchased with cash, and that cash is received immediately for all sales. %24
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Journal entries to posted on Decemebr 31st 2020 Cash Dr 899136 To Sales Cr ... View the full answer
Related Book For
Intermediate Accounting
ISBN: 978-0132162302
1st edition
Authors: Elizabeth A. Gordon, Jana S. Raedy, Alexander J. Sannella
Posted Date:
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