Cho Co. includes one coupon in each box of cereal it sells. In return for 5...

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Accounting

Cho Co. includes one coupon in each box of cereal it sells. Inreturn for 5 coupons and $1, customers receive a Cho branded spoonthat the company purchases for $2 each. Cho's experience indicatesthat 40 percent of the coupons will be redeemed. During 2019,200,000 boxes of cereal were sold, 20,000 spoons were purchased,and 55,000 coupons were redeemed. During 2020, 280,000 boxes ofcereal were sold, 25,000 spoons were purchased, and 90,000 couponswere redeemed. The premium payable account balance at the beginningof the 2019 fiscal year was $8,000. Determine the premium expensereported in the income statement and the ending premium liabilitybalance reported in the balance sheet for 2019 and 2020.
2019 Premium Expense: $
2019 Ending Premium Liability: $
2020 Premium Expense: $
2020 Ending Premium Liability: $

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1 box 1 coupan For 5 coupans 1spoon 1 spoon 2 Customer pays for 1 spoon 1 Premium expense on company per spoon 1 Particulars Year 2019 Year 2020 Sale of boxes 200000 280000 Coupan issued 200000 See Answer

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