ACCT550 Intermediate Accounting Assignment

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ACCT550 Intermediate Accounting Assignment - DeVry University, USA

Problem - Premium Entries and Financial Statement Presentation

Sycamore Candy Company offers an MPB download {seven-single medley) as a premium for every five candy bar wrappers presented by customers together with $2.50. The candy bars are sold by the company to distributors for 30 cents each. The purchase price of each download code to the company is $2.25. In addition, it costs 50 cents to distribute each code. The results of the premium plan for the years 2017 and 2018 are as follows. (All purchases and sales are for cash.)

 

2017

2018

MP3 codes purchased

250,000

330,000

Candy bars sold

2,895,400

2,743,600

Wrappers redeemed

1,200,000

1,500,000

2017 wrappers expected to be redeemed in 2018

290,000

 

2018 wrappers expected to be redeemed in 2019

 

350,000

Required - Prepare the journal entries that should be made in 2017 and 2018 to record 1the transactions related to the premium plan of the Sycamore Candy Company.

Reference no: EM132453971

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