Question
Sunland Music Shop gives its customers coupons redeemable for a poster plus a Bo Diddley CD. One coupon is issued for each dollar of sales.
Sunland Music Shop gives its customers coupons redeemable for a poster plus a Bo Diddley CD. One coupon is issued for each dollar of sales. On the surrender of 100 coupons and $6.00 cash, the poster and CD are given to the customer. It is estimated that 80% of the coupons will be presented for redemption. Sales for the first period were $700,000, and the coupons redeemed totaled 425,000. Sales for the second period were $860,000, and the coupons redeemed totaled 755,000. Sunland Music Shop bought 20,000 posters at $2.5/poster and 20,000 CDs at $7.5/CD. Prepare the following entries for the two periods, assuming all the coupons expected to be redeemed from the first period were redeemed by the end of the second period.
I need the red boxes! Thanks!
- Your answer is partially correct. To record coupons redeemed. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Period 1 Account Titles and Explanation Debit Credit Premium Expense 17000 Cash 25500 Inventory of Premiums 42500 Period 2 Account Titles and Explanation Debit Credit Premium Liability 5400 Premium Expense 17000 Cash 45300 Inventory of Premiums 67700Step by Step Solution
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