Reference no: EM13375401

Please answer questions: (one below and the other attached
1)Presented below are three independent situations. (Solve below for the blank dollar signs-fill in the answer)

A. Marquart Stamp Company records stamp service revenue and provides for the cost of redemptions in the year stamps are sold to licensees. Marquart's past experience indicates that only 80% of the stamps sold to licensees will be redeemed. Marquart's liability for stamp redemptions was $13,534,000 at December 31, 2011. Additional information for 2012 is as follows.

Stamp service revenue from stamps sold to licensees $8,759,000
Cost of redemptions (stamps sold prior to 1/1/12) 5,939,000

If all the stamps sold in 2012 were presented for redemption in 2013, the redemption cost would be $5,659,300. What amount should Marquart report as a liability for stamp redemptions at December 31, 2012?

Liability for stamp redemptions at December 31, 2012 $____________________

B. In packages of its products, Wiseman Inc. includes coupons that may be presented at retail stores to obtain discounts on other Wiseman products. Retailers are reimbursed for the face amount of coupons redeemed plus 10% of that amount for handling costs. Wiseman honors requests for coupon redemption by retailers up to 3 months after the consumer expiration date. Wiseman estimates that 60% of all coupons issued will ultimately be redeemed. Information relating to coupons issued by Wiseman during 2012 is as follows.

Consumer expiration date 12/31/12
Total face amount of coupons issued $884,600
Total payments to retailers as of 12/31/12 352,500

What amount should Wiseman report as a liability for unredeemed coupons at December 31, 2012?

Liability for unredeemed coupons $_____________________

C. Newell Company sold 639,700 boxes of pie mix under a new sales promotional program. Each box contains one coupon, which when submitted with $4.30, entitles the customer to a baking pan. Newell pays $6.30 per pan and $0.80 for handling and shipping. Newell estimates that 70% of the coupons will be redeemed, even though only 347,400 coupons had been processed during 2012. What amount should Newell report as a liability for unredeemed coupons at December 31, 2012?

Liability for unredeemed coupons at December 31, 2012 $____________________ 

On January 1, 2012, Osborn Company sold 11% bonds having a maturity value of $948,000 for $1,021,746, which provides the bondholders with a 9% yield. The bonds are dated January 1, 2012, and mature January 1, 2017, with interest payable December 31 of each year. Osborn Company allocates interest and unamortized discount or premium on the effective-interest basis.

 

(a) Prepare the journal entry at the date of the bond issuance. (Round answers to 0 decimal places, e.g. $38,548. Credit account titles are automatically indented when amount is entered. Do not indent manually.)

 

Account Titles and Explanation	Debit	Credit
__________________	_________	___________
__________________	_________	___________
__________________	_________	___________

 

(b) Prepare a schedule of interest expense and bond amortization for 2012–2014. (Round answers to 0 decimal places, e.g. $38,548.)

 

Schedule of Interest Expense and Bond Premium Amortization Effective-Interest Method
Date		Cash Paid		Interest Expense		Premim Amortizd		Carrying Amount of Bonds
1/1/12		$		$		$		$
12/31/12		$		$		$		$
12/31/13		$		$		$		$
12/31/14		$		$		$		$

 

(c) Prepare the journal entry to record the interest payment and the amortization for 2012. (Round answers to 0 decimal places, e.g. $38,548. Credit account titles are automatically indented when amount is entered. Do not indent manually.)

 

Account Titles and Explanation	Debit	Credit
___________________	_____________	_____________
___________________	_____________	_____________
_____________________	_____________	______________

 

(d) Prepare the journal entry to record the interest payment and the amortization for 2014. (Round answers to 0 decimal places, e.g. $38,548. Credit account titles are automatically indented when amount is entered. Do not indent manually.)

 

Account Titles and Explanation	Debit	Credit
______________________	_____________	_____________
______________________	_____________	_____________
_____________________	_____________	_____________