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Question - CAVS Company offers audio discs featuring local bands for 2020 as a premium for every 5 chocolate wrappers presented by customers together with P5. The company sells the chocolate bars to distributors for P70 each. The purchase price of each audio disc is P12; in addition, it costs P2 to mail each CD. The results of the premium plan for the years 2020 and 2021 are as follows:
2020
2021
Audio discs purchased
70,000
90,000
Chocolate bars sold
425,000
595,000
Wrappers redeemed
290,000
320,000
2019 wrappers expected to be redeemed in 2020
60,000
2020 wrappers expected to be redeemed in 2021
80,000
Required -
1. What the liability balance to be reported in the 2020 statement of financial position?
2. What the liability balance to be reported in the 2021 statement of financial position?
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