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The following are three independent situations. Sheridan Stamp Company records stamp service revenue and provides for the cost of redemptions in the year stamps are
The following are three independent situations.
Sheridan Stamp Company records stamp service revenue and provides for the cost of redemptions in the year stamps are sold to licensees. Sheridan's past experience indicates that only of the stamps sold to licensees will be redeemed. Sheridan's liability for stamp redemptions was $ at December Additional information for is as follows:
Stamp service revenue from stamps sold to licensees
$
Cost of redemptions stamps sold prior to
If all the stamps sold in were presented for redemption in the redemption cost would be $ What amount should Sheridan report as a liability for stamp redemptions at December
Liability for stamp redemptions at December
$
In packages of its products, Pharoah Corp. includes coupons that may be presented at retail stores to obtain discounts on other Pharoah products. Retailers are reimbursed for the face amount of coupons redeemed plus of that amount for handling costs. Pharoah honors requests for coupon redemption by retailers up to months after the consumer expiration date. Pharoah estimates that of all coupons issued will ultimately be redeemed. Information relating to coupons issued by Pharoah during is as follows:
Consumer expiration date
Total face amount of coupons issued
$
Total payments to retailers as of
What amount should Pharoah report as a liability for unredeemed coupons at December
Liability for unredeemed coupons
$
Oriole Company sold boxes of cereal under a new sales promotional program. Each box contains one coupon, which submitted with $ entitles the customer to a stuffed animal. Oriole pays $ per stuffed animal and $ for handling and shipping. Oriole estimates that of the coupons will be redeemed, even though only coupons had been processed during What amount should Oriole report as a liability for unredeemed coupons at December
Liability for unredeemed coupons at December
$
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