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To stimulate the sales of its Alladin breakfast cereal, Loptien Company places 1 coupon in each box. 4 coupons are redeemable for a premium consisting
To stimulate the sales of its Alladin breakfast cereal, Loptien Company places 1 coupon in each box. 4 coupons are redeemable for a premium consisting of a children's hand puppet. In 2015, the company purchases 40,700 puppets at $1.55 each and sells 378,400 boxes of Alladin at $3.80 a box. From its experience with other similar premium offers, the company estimates that 40% of the coupons issued will be mailed back for redemption. During 2015, 111,200 coupons are presented for redemption. Prepare the journal entries that should be recorded in 2015 relative to the premium plan
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