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MEGA offers a includes 1 coupon in each box of soap powder that it packs, 8 coupons being redeemable for a premium consisting of a kitchen utensil. In 2010, Moon Company purchased 12,000 premiums at $1.50 each, purchased 800000 boxes of soap powder at 0.20 and sold 225,000 boxes of soap powder @ $50 per box. Based on past experience, it is estimated that 80% of the coupons will be redeemed. During 2010, 80,000 coupons were presented for redemption. During 2011, 40000 premiums were purchased at $2 The company purchased 6000000 at 0.20, sold 275,000 boxes of soap at 0.50 and 120,000 coupons were presented for redemption. Instructions Prepare all the entries that would be made relative to sales of soap powder and to the premium plan in both 2010 and 2011. Assume a FIFO inventory flow.
Financial Statement Analysis and Preparation
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Computation of Free Cash Flow
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