Number of box tops customer must return to receive spatula set 7 Fee to be paid by
Question:
Number of box tops customer must return to receive spatula set 7
Fee to be paid by customer to receive spatula set $ 3.00
2020 2021
Number of boxes of mashed potatoes sold by Champion 2,824,999 2,909,749
Percentage of box tops expected to be redeemed by customers 56% 58%
Actual number of box tops redeemed 1,057,497 1,057,497
Sales price per box of mashed potatoes $ 7.00 $ 7.00
Number of spatula sets purchased by Champion 231,000 246,093
Cost to Champion of postage to mail each spatula set $ 2.25 $ 2.25
Cost to Champion to purchase one spatula set $ 5.00 $ 5.00
Assume that Champion Foods has a year end of December 31, and follows ASPE. Also assume that all sales of mashed potatoes are made on account.
Required:
Prepare the journal entries that should be made in 2020 to record the transactions pertaining to Champion's premium plan. Ignore cost of goods sold.
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill