Scribd Logo
Upload

Welcome to Scribd!

  • 55 views

    Inbound 6094510472110192055

    Uploaded by

    Marielle
    Tamara Company offered premiums with cereal packages and estimated an 80% redemption rate. Based on packages sold, premiums purchased, and coupons redeemed in 2009, the estimated liability for outstanding coupons on December 31, 2009 is 1,280,000. Armco Company offered promotional T-shirts for bottle crowns returned with a P5 payment. Based on bottles sold, T-shirts purchased and distributed, and a 40% redemption rate, the estimated liability for outstanding promotional items on the close of the first year is 375,000. Torie Company provides a 2-year warranty on a new product. Based on 2007-2008 sales and warranty expenditures, the estimated warranty liability on

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd

    Inbound 6094510472110192055

    Uploaded by

    Marielle
    55 views2 pages
    Tamara Company offered premiums with cereal packages and estimated an 80% redemption rate. Based on packages sold, premiums purchased, and coupons redeemed in 2009, the estimated liability for outstanding coupons on December 31, 2009 is 1,280,000. Armco Company offered promotional T-shirts for bottle crowns returned with a P5 payment. Based on bottles sold, T-shirts purchased and distributed, and a 40% redemption rate, the estimated liability for outstanding promotional items on the close of the first year is 375,000. Torie Company provides a 2-year warranty on a new product. Based on 2007-2008 sales and warranty expenditures, the estimated warranty liability on

    Original Description:

    None

    Original Title

    inbound6094510472110192055

    Copyright

    © © All Rights Reserved

    Available Formats

    DOCX, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    Tamara Company offered premiums with cereal packages and estimated an 80% redemption rate. Based on packages sold, premiums purchased, and coupons redeemed in 2009, the estimated liability for outstanding coupons on December 31, 2009 is 1,280,000. Armco Company offered promotional T-shirts for bottle crowns returned with a P5 payment. Based on bottles sold, T-shirts purchased and distributed, and a 40% redemption rate, the estimated liability for outstanding promotional items on the close of the first year is 375,000. Torie Company provides a 2-year warranty on a new product. Based on 2007-2008 sales and warranty expenditures, the estimated warranty liability on

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    55 views2 pages

    Inbound 6094510472110192055

    Uploaded by

    Marielle
    Tamara Company offered premiums with cereal packages and estimated an 80% redemption rate. Based on packages sold, premiums purchased, and coupons redeemed in 2009, the estimated liability for outstanding coupons on December 31, 2009 is 1,280,000. Armco Company offered promotional T-shirts for bottle crowns returned with a P5 payment. Based on bottles sold, T-shirts purchased and distributed, and a 40% redemption rate, the estimated liability for outstanding promotional items on the close of the first year is 375,000. Torie Company provides a 2-year warranty on a new product. Based on 2007-2008 sales and warranty expenditures, the estimated warranty liability on

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    You are on page 1of 2

    Extra challenges 😊

    LIABILITIES

    PREMIUMS LIABILITY
    Prob1
    To increase sales during the summer break and remainder of the year, Tamara Company inaugurated a promotional
    campaign on February 1, 2009. Tamara placed a coupon redeemable for a premium in each package of cereal
    sold at P300. Each premium cost P200. A premium is offered to customers who send in 5 coupons and a
    remittance of P50. The distribution expense per premium is P10. Tamara estimated that 80% of the coupons
    placed in each package will be redeemed. For the eleven months ended December 31, 2009, the following is
    available:
    Packages of cereal sold 50,000
    Premiums purchased 8,000
    Coupons redeemed 30,000
    What is the estimated liability for coupons on December 31, 2009?
    A. 320,000 C. 1,280,000
    B. 400,000 D. 1,500,000

    Prob 2
    Armco Company embarked on a promotional program whereby a T-shirt costing P15 each is given away for every 10
    bottle crowns returned plus P5. Armco Company estimates that only 40% of the bottle crowns in the hands of
    consumers will be presented for redemption. The following information is available
    Quantity Amount
    Bottles 1,000,000 40,000,000
    T-shirts bought for give-away 15,000 225,000
    T-shirts distributed to customers 10,000
    At the close of the first year , Armco should recognize an estimated liability for promotional items outstanding
    amounting to
    A. 250,000 C. 375,000
    B. 300,000 D. 450,000

    Warranty Liability
    Prob 3.
    During 2008, Torie Company introduced a new product carrying a two-year warranty against defects. The estimated
    warranty costs related to peso sales are 3% within 12 months following sale and 5% in the second 12 months
    following sale. Sales and actual warranty expenditures for the years ended December 31, 2007 and 2008 are as
    follows:
    Sales Actual expenditures
    2007 40,000,000 1,000,000
    2008 50,000,000 4,000,000
    At December 31, 2008, Torie would report estimated warranty liability of
    A. 0 C. 2,200,000
    B. 1,500,000 D. 2,500,000

    Prob 4
    . Electronics Company sells an electric timer that carries a 60-day unconditional warranty against product
    failure. Based on a reliable statistical analysis, Electronics Company knows that between the sale and the lapse
    of the product warranty, 2% of units sold will require an average cost of P100 per unit.
    The following data reflect the recent experience of Electronics Company for the year 2009:
    October November December
    Extra challenges 😊

    LIABILITIES

    Units sold 40,000 38,000 50,000


    Known product failures from sales of:
    October 200 300 200
    November 140 320
    December 230
    What is Electronics Company’s estimated warranty liability on December 31, 2009?
    A. 77,000 C. 117,000
    B. 107,000 D. 176,000

    Deposits on Returnable Containers


    Prob 5
    Buffalo Company sells its products in reusable containers. The customer is charged a deposit for
    each container delivered and receives a refund for each container returned within two years after the
    year of delivery. Buffalo accounts for the containers not returned within the time limit as being retired by
    sale at the deposit amount. Information for 2009 is as follows:

    Container deposits on January 1, 2009 from deliveries in:


    2007 700,000
    2008 3,300,000 4,000,000
    Deposits for containers delivered in 2009 5,000,000
    Deposits for containers returned in 2009 from deliveries in
    2007 400,000
    2008 1,500,000
    2009 2,800,000 4,700,000
    On the December 31, 2009 balance sheet, the liability for deposits on returnable containers should be
    A. 2,200,000 C. 4,300,000
    B. 4,000,000 D. 9,000,000

    “When everything seems to be a priority, nothing is”


    /map 😊

    You might also like