[39] In December 2019, Krunch Co. began including one coupon in each package of crackers that is
Question:
[39] In December 2019, Krunch Co. began including one coupon in each package of crackers that is sold and offered a color pen in exchange for 50 cents and five coupons. The pens cost Krnch 90 cents each and the coupons are valid for three years from the year of sale. Eventually 60% of the coupons were expected to be redeemed. During December, 2019, Krunch sold 2,200,000 packages of crackers and no coupons were redeemed. How much should Krunch report as estimated liability for coupons In its December 31, 2019 balance sheet, and how should the amount be classified? EXAMPLE: [$XX; Non-current]
a.$105,600; Non-current.
b.$396,000; Non-current.
c.$528,000; Non-Current.
d.
$105,600; Current.
e.
None of the above
[40] Wireless Systems Inc. employed 14,000 employees during 2018. Each employee earns twenty days of paid vacation per calendar year. Up to five days of this entitlement may be carried forward and taken in the following year but cannot be carried forward any further. Employees are not paid for any vacations they fail to take. As at December 31, 2019, 12,260 employees had used their full vacation entitlement for 2019. The remaining employees are carrying forward an average of 3 days per employee and they are all expected to use these vacation days. Half of the employee group earn $300 per day and the other half work 8 hour days and earn $15 per hour- and this is representative of those who still have leftover vacation earned. What amount of liability should appear in the companys balance sheet at December 31, 2018 with regard to accrued vacation pay?
a.$1,096,200.
b.$1,566,000.
c.$626,400.
d.
$1,827,000.
e.
none of the above.