Prepare the entries for the two periods

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Question - Irving Music Shop gives its customers coupons redeemable for a poster plus a Classic CD. One coupon is issued for each peso of sales. On the surrender of 100 coupons and P5.00 cash, the poster and CD are given to the customer. It is estimated that 80% of the coupons  will be presented for redemption. Sales for the first period were P700,000 and the coupons redeemed totaled 340,000. Sales for the second period were 840,000, and the coupons redeemed totaled 850,000. Irving Music Shop bought 20,000 posters at P2.00/poster and 20,000 CD's at P6.00/CD.

Prepare the following entries for the two periods, assuming all the coupons expected to be redeemed from the first period were determined by the end of the second period.

a. To record coupons redeemed for period 1.

b. To record estimated liability for period 1.

c. To record coupons redeemed for period 2.

d. To record estimated liability for period 2.

Reference no: EM133012467

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