How much is the premiums expense for the year

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Question - JKL Company started a promotional program in 2018 where an eco-friendly bag shall be given to customers upon presenting 100 product labels plus P10 cash. On January 1, 2019, premiums liability has a balance of P200,000. 80% of the premiums is estimated to be redeemed. The following information is deemed relevant in relation to the program:

 

2018

2019

Sales

P52,500,000

P46,875,000

Total cost of bags purchased

220,000

1,000,000

Bags actually distributed

8,000

40,000

Estimated bags to be distributed the following year

20,000

5,000

Required -

1) How much is the premiums expense for the year 2019?

2) How much is the premiums expense for the year 2018?

3) How much is the premiums liability for the year 2019?

4) How much is the premiums inventory at the end of 2018?

5) How much is the premiums inventory at the end of 2019?

Reference no: EM132547137

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