Find the liability balance to be reported

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Reference no: EM133112877

Question - CAVS Company offers audio discs featuring local bands for 2020 as a premium for every 5 chocolate wrappers presented by customers together with P5. The company sells the chocolate bars to distributors for P70 each. The purchase price of each audio disc is P12; in addition, it costs P2 to mail each CD. The results of the premium plan for the years 2020 and 2021 are as follows:

 

2020

2021

Audio discs purchased

70,000

90,000

Chocolate bars sold

425,000

595,000

Wrappers redeemed

290,000

320,000

2019 wrappers expected to be redeemed in 2020

60,000


2020 wrappers expected to be redeemed in 2021


80,000

Required -

1. Find the liability balance to be reported in the 2020 statement of financial position?

2. Find the liability balance to be reported in the 2021 statement of financial position?

Reference no: EM133112877

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