Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Problem 13-12 Sunland Music Emporium carries a wide variety of musical instruments, sound reproduction equipment, recorded music, and sheet music. Sunland uses two sales promotion

Problem 13-12 Sunland Music Emporium carries a wide variety of musical instruments, sound reproduction equipment, recorded music, and sheet music. Sunland uses two sales promotion techniqueswarranties and premiumsto attract customers. Musical instruments and sound equipment are sold with a one-year warranty for replacement of parts and labor. The estimated warranty cost, based on past experience, is 2% of sales. The premium is offered on the recorded and sheet music. Customers receive a coupon for each dollar spent on recorded music or sheet music. Customers may exchange 200 coupons and $10 for an MP3 player. Sunland pays $21 for each player and estimates that 50% of the coupons given to customers will be redeemed. Sunlands total sales for 2017 were $6,824,000$6,010,000 from musical instruments and sound reproduction equipment and $814,000 from recorded music and sheet music. Replacement parts and labor for warranty work totaled $153,400 during 2017. A total of 5,960 players used in the premium program were purchased during the year and there were 1,102,000 coupons redeemed in 2017. The balances in the accounts related to warranties and premiums on January 1, 2017, were as shown below. Inventory of Premiums $ 36,310 Premium Liability 42,300 Warranty Liability 147,800 Sunland Music Emporium is preparing its financial statements for the year ended December 31, 2017. Determine the amounts that will be shown on the 2017 financial statements for the following. (Round answers to 0 decimal places, e.g. 125.) (a) Warranty Expense $ (b) Warranty Liability $ (c) Premium Expense $ (d) Inventory of Premiums $ (e) Premium Liability $

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Students also viewed these Accounting questions

Question

Explain the process of MBO

Answered: 1 week ago

Question

Analyze the impact of labor unions on health care.

Answered: 1 week ago

Question

Assess three motivational theories as they apply to health care.

Answered: 1 week ago

Question

Discuss the history of U.S. labor unions.

Answered: 1 week ago