Sweet Dates Company offers a premium to its customers—a glassbowl (cost to Sweet Dates is $0.90) upon return of 40 coupons. Twocoupons are placed in each box of dates sold. The companyestimates, on the basis of past experience, that only 70% of thecoupons will ever be redeemed. During 2016, 10 million boxes ofdates are sold, for cash, at $0.30 each. Eight million coupons areredeemed during 2016. Sweet Dates purchased 360,000 glass bowls forthe plan on January 1, 2016.
| 1. | Prepare the journal entries related to the sale of dates andthe premium plan in 2016. |
| 2. | Show how the preceding items would be reported on the December31, 2016, balance sheet. |
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On January 1, 2017, Fro-Yo Inc. began offering customers a cashrebate of $5.00 if the customer mails in 10 proof-of-purchaselabels from its frozen yogurt containers. Based on historicalexperience, the company estimates that 20% of the labels will beredeemed. During 2017, the company sold 5,000,000 frozen yogurtcontainers at $1, cash, per container. From these sales, 800,000labels were redeemed in 2017, 150,000 labels were redeemed in 2018,and the remaining labels were never redeemed.
| 1. | Prepare the journal entries related to the sale of frozenyogurt and the cash rebate offer for 2017 and 2018. |
| 2. | Next Level Assume that 300,000 labels were redeemed in 2018.Prepare the journal entries related to the cash rebate offer for2018. |
