Chapter 1 Problem 1-19
1. Cash (400,000 x 9) 3,600,000
Sales 3,600,000
2. Premiums 900,000
Cash 900,000
3. Premium expense 30,000
Cash 30,000
4. Cash (8,000 x 5) 40,000
Premium expense (8,000 x 85) 680,000
Premiums (8,000 x 90) 720,000
5. Premium expense (2,000 x 85) 170,000
Estimated premiums payable 170,000
Bottle caps to be redeemed (25% x 400,000) 100,000
Less: Bottle caps redeemed (8,000 pens x 10) 80,000
Bottle caps outstanding 20,000
Premiums to be distributed on the balance of bottle caps (20,000 /10) 2,000
6. Premium expense 150,000
Cash (30 x 5,000) 150,000
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