1. In 2021, Suho Company sold 500,000 boxes of cake mix under a new sales promotional program. Each box contained one coupon, which entitled the customer to a baking pan upon remittance of P40.The entity paid P50 per pan and P5 for handling and shipping. The entity estimated that 80% of the coupons will be redeemed, even though only 300,000 coupons had been processed during 2021. What amount should be reported as premium expense for 2021?

2. On December 10, 2021, an employee filed a P2,000,000 lawsuit against Wayne Company for damages suffered when one of Waynes plant exploded on October 31, 2021. The legal counsel believed the entity would probably lose the lawsuit and estimated the loss to be P500,000. The employee offered to settle the lawsuit out of court for P900,000 but the entity did not agree to the settlement. On December 31, 2021, what amount should be reported as liability from lawsuit?