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The document contains four problems involving premium expenses, liability for unredeemed coupons, container deposits, and employee bonuses. It provides details on units sold, redemption rates, costs, and tax rates to calculate various expenses and liabilities.

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Rafols Annabelle
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44 views2 pages

2 Ac4

The document contains four problems involving premium expenses, liability for unredeemed coupons, container deposits, and employee bonuses. It provides details on units sold, redemption rates, costs, and tax rates to calculate various expenses and liabilities.

Uploaded by

Rafols Annabelle
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
Download as docx, pdf, or txt
Download as docx, pdf, or txt
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(Premiums) 1.

During the current year, ABC company sold 30,000 boxes of cake mix @P150 each under
the new sales promotional program.

Each box contained one coupon, which entitled the customer to a baking tray upon remittance of P40.

No. of premiums bought 22,000


Premium cost per unit 75.00
Cost of shipping premiums 10.00
Estimated % of redemption 70%
Actual no. of coupons redeemed 15,000

1.1. What is the amount to be reported as premium expense for the year?
1.2. What is the ending balance of premiums?
1.3. What amount should be reported as liability for unredeemed coupons at year-end?

2. During the current year, ABC company sold 30,000 boxes of cake mix @P150 each under the new
sales promotional program.

Each box contained one coupon, which entitled the customer to one baking tray upon remittance of 5
coupons.

No. of premiums bought 5,500


Premium cost per unit 45.00
Cost of shipping premiums 5.00
Estimated % of redemption 90%
Actual no. of coupons redeemed 20,000

2.1What is the amount to be reported as premium expense for the year?


2.2What is the ending balance of premiums?
2.3What amount should be reported as liability for unredeemed coupons at year-end?

(Container’s Deposit) Problem 3. Jolly Corp. sells cooking oil. A gallon sells for P1,250, this amount
includes deposit for gallons P450. The deposit will be refunded once the customer returns the container.
A gallon container costs Jolly P400 each.

Numbers of oil gallons sold during the year totaled 10,000. At the end of December of the current year,
a customer informed Jolly that he won’t be able to return 25 containers as it was destroyed during a fire.

Prepare all the necessary journal entries.


(Employee Bonus) Problem 4

Income before tax and bonus 1,000,000.00


Tax rate 35%
Bonus rate 15%

Compute the ff:

1. Bonus is income before tax before bonus


2. Bonus is income before tax after bonus
3. Bonus is income after tax before bonus
4. Bonus is income after bonus and after tax

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