Novak offers an MP3 download (seven-single medley) as a premium for every 5 candy bar wrappers...
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Novak offers an MP3 download (seven-single medley) as a premium for every 5 candy bar wrappers presented by customers together with $2.55. The candy bars are sold by the company to distributors for 30 cents each. The purchase price of each download code to the company is $2.30. In addition, it costs 50 cents to distribute each code. The results of the premium plan for the years 2020 and 2021 are as follows. (All purchases and sales are for cash.) MP3 codes purchased Candy bars sold Wrappers redeemed 2020 wrappers expected to be redeemed in 2021 2021 wrappers expected to be redeemed in 2022 2020 2021 255,000 336,600 3,147,300 2,880,400 1,224,000 1.530,000 295,800 357,000 Indicate the amounts for each accounts, and classifications of the items related to the premium plan that would appear on the balance sheet and the income statement at the end of 2020 and 2021. Account Inventory of Premiums Premium Liability Premium Expense 2020 Amount 2021 Classification Novak offers an MP3 download (seven-single medley) as a premium for every 5 candy bar wrappers presented by customers together with $2.55. The candy bars are sold by the company to distributors for 30 cents each. The purchase price of each download code to the company is $2.30. In addition, it costs 50 cents to distribute each code. The results of the premium plan for the years 2020 and 2021 are as follows. (All purchases and sales are for cash.) MP3 codes purchased Candy bars sold Wrappers redeemed 2020 wrappers expected to be redeemed in 2021 2021 wrappers expected to be redeemed in 2022 2020 2021 255,000 336,600 3,147,300 2,880,400 1,224,000 1.530,000 295,800 357,000 Indicate the amounts for each accounts, and classifications of the items related to the premium plan that would appear on the balance sheet and the income statement at the end of 2020 and 2021. Account Inventory of Premiums Premium Liability Premium Expense 2020 Amount 2021 Classification
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Answer rating: 100% (QA)
1 Inventory of Premium This account represents the value of the MP3 download codes that have been purchased but have not been redeemed yet Inventory o... View the full answer
Related Book For
Intermediate Accounting IFRS
ISBN: 978-1119372936
3rd edition
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield
Posted Date:
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