E13-15 (Premiums) Presented below and on page 740 are three independent situations. 1. Hairston Stamp Company records stamp service revenue and provides for the cost of redemptions in the year stamps are sold to licensees. Hairstons past experience indicates that only 80% of the

stamps sold to licensees will be redeemed. Hairstons liability for stamp redemptions was $13,000,000 at December 31, 2013. Additional information for 2014 is as follows. Stamp service revenue from stamps sold to licensees $9,500,000 Cost of redemptions (stamps sold prior to 1/1/14) 6,000,000 If all the stamps sold in 2014 were presented for redemption in 2015, the redemption cost would be $5,200,000. What amount should Hairston report as a liability for stamp redemptions at December 31, 2014? 2. In packages of its products, Burnitz Inc. includes coupons that may be presented at retail stores to obtain discounts on other Burnitz products. Retailers are reimbursed for the face amount of coupons redeemed plus 10% of that amount for handling costs. Burnitz honors requests for coupon redemption by retailers up to 3 months after the consumer expiration date. Burnitz estimates that 60% of all coupons issued will ultimately be redeemed. Information relating to coupons issued by Burnitz during 2014 is as follows. Consumer expiration date 12/31/14 Total face amount of coupons issued $800,000 Total payments to retailers as of 12/31/14 330,000 What amount should Burnitz report as a liability for unredeemed coupons at December 31, 2014? 3. Roland Company sold 700,000 boxes of pie mix under a new sales promotional program. Each box contains one coupon, which submitted with $4.00, entitles the customer to a baking pan. Roland pays $6.00 per pan and $0.50 for handling and shipping. Roland estimates that 70% of the coupons will be redeemed, even though only 250,000 coupons had been processed during 2014. What amount should Roland report as a liability for unredeemed coupons at December 31, 2014?

PLEASE ASNSWER E3-16 ABOVE IS INFORMATION OF E13-15

E13-6 (Compensated Absences) Assume the facts in E13-5 except that Matt Broderick Company has chosen not to accrue paid sick leave until used, and has chosen to accrue vacation time at expected future rates of pay without discounting. The company used the following projected rates to accrue vacation time. Year in Which Vacation Projected Future Pay Rates Time Was Earned Used to Accrue Vacation Pay- 2013 $10.75 2014 11.60 Instructions (a) Prepare journal entries to record transactions related to compensated absences during 2013 and 2014. (b) Compute the amounts of any liability for compensated absences that should be reported on the balance sheet at December 31, 2013, and 2014.