Reference no: EM132829923
Problem 1 - SSCC Company includes in packages of its products, coupons that may be presented to retail stocks to obtain discounts on other Broad Company products. Retailers are reimbursed for the face amount of coupons redeemed plus 10% of that amount for handling costs. The company honors requests for coupon redemption by retailers up to three months after the coupon expiration date. The company estimates that 70% of all coupons issued will ultimately be redeemed. Informationi relating to coupons issued by the company during 2020 is as follows:
Coupon expiration date December 31, 2020
Total face amount of coupons issued 780,000
Total payments to retailers as of December 31, 2020 362,100
1. How much is the estimated premium liability as of December 31, 2020?
2. How much is the premium expense for 2020?
Problem 2 - Gerbs, Inc. sells calculators that carry a one-year warranty against manufacturer's defects. Based on company experience, warranty costs are estimated at P300 per calculator. During 2020, Gerbs sales amounted to P3,000,000 and paid warranty costs amounting to P245,000. Gerbs estimates that 80% of these calculators will be returned due to defects. Each calculators was sold for P200.
1. How much is the warranty liability?
2. How much is the warranty expense during the period?
Problem 3 - On December 26, 2020, Jerome Company was a defendant in a pending lawsuit. The suit arose from the breach of contract between Jerome and Rose Company during 2020. Based on Jerome's legal counsel it is reasonably possible that Jerome will have to pay P300,000 worth of damages. On February 14, 2021, the suit was settled out of court by Jerome and Rose amounting to P250,000.
1. How should the provision be accounted for in the financial statements?
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Compute for the equivalents that will be reported
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Describe the type of review that Anya has requested
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Entrepreneurial activity is culturally diverse
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Discuss influence of china on the political development
: Discuss with your classmates the influence of China on the political and religious development of Japan during the first millennium CE. Debate which influence.
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How much is the warranty expense during the period
: Gerbs sales amounted to P3,000,000 and paid warranty costs amounting to P245,000. How much is the warranty expense during the period
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Agencies and constituencies in negotiations
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Discussion on the topic asian empires
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Which activities best describes manager job of controlling
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Groups of customer different prices for same product
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