Aztec Inc. uses box tops to draw in more customers. Each XL boxed food item comes with one box top, and once the customer has accumulated eight box tops, they may send them in to exchange them for a stuffed animal. At the beginning of 2009, Aztec purchased 30,000 stuffed animals at a cost of $3 each, then proceeded to sell 500,000 XL boxed food items at a price of $10 each throughout the year. Aztec estimates that 40% of box tops will be redeemed. At the end of 2009, 120,000 coupons were redeemed, and thusly, 15,000 stuffed animals were shipped to customers.

Determine Aztec Inc's Premium expense, then create a journal entry to record it.

Answer rating: 100% (QA)

Answer Premium Expenses Box top expected to be redeemed 500... View the full answer