Solve for:

Problem 1-3 a.) Prepare necessary entries throughout 2017 related to the premiums. b.) What is the premium liability on December 31, 2017?

Problem 1-4 What is the estimated liability for outstanding premium on December 31, 2017?

Problem 1-3 Beginning 2017, Mercy Company began marketing a new beer called Serbesa". To help promote the product, the management is offering a special serbesa beer mug to each customer for every 20 specially marked bottle caps of Serbesa. The entity estimated that out of the 300,000 bottle caps of Serbesa sold during 2017, only 50% of the marked bottle caps would be redeemed. During 2017, the entity purchased 8,000 beer mugs at a total cost of P360,000 for P45 each. During the year, the entity already distributed 4,500 mugs to customers. Required: A. Prepare necessary journal entries throughout 2017 related to the premiums. B. What is the premium liability on December 31, 2017? Problem 1-4 Blump Company offers the customers a pottery cereal bowl if they send in three boxtops from the products and P10. The entity estimated that 60% of the boxtops would be redeemed. In 2017, the entity sold 675,000 boxes and customers redeemed 330,000 boxtops receiving 110,000 bowls. The cost of each bowl is P25. What is the estimated liability for outstanding premium on December 31, 2017