Mooshu Company offers a Sparty coffee mug as a premium. Customers must submit four (4) coupons along with $1 for each mug. The purchase price of each mug to the company is $2.25. One (1) coupon is received for each purchase of a $4 box of candy. Seventy percent (70%) of coupons are ultimately expected to be redeemed. The results of the premium plan for the years 2020 and 2021 are shown in the table below (assume all purchases and sales are for cash):

2020 2021 _

Coffee mugs purchased (premium) 1,000,000 1,120,000

Boxes of candy sold 5,600,000 6,200,000

Coupons redeemed 3,400,000 4,200,000

Instructions: a) Determine the total premium expense to be reported in the income statement for 2020 and 2021, and the ending B/S estimated premium liability for both years. Determine the ending B/S premium inventory for 2020 only. Assume a zero balance in all accounts on 1/1/2020. The 2021 redemptions include some coupons redeemable in 2020.

	2020	2021
Premium expense
Ending estimated premium liability (both 2020 & 2021 are required)
Ending balance - Premium Inventory 2020 only is required)		________

b) Please provide the entry for coupon redemptions for 2020 only:

c) Mooshu also has a 2 year warranty on a mini-player it sells. If Mooshu expects .6% of sales to be defective, and the sales price per mini-player is $18, what entry is recorded for warranty expense for 2020 and 2021, given that 2020 sales total 740,000 mini-players, and 2021 sales total 860,000 mini-players?

	2020	2021

d) Actual returns of mini-players for replacement related to 2020 sales were $32,000 in 2020, and $43,000 in 2021. Actual returns related to 2021 sales were $40,000 in 2021, and $48,000 in 2022. What can be concluded about the average quality of the canisters sold during 2020 and 2021 given these numbers? Please circle your conclusion, and use numbers to support your response.

better than expected worse than expected about as expected