Problem 13-9 Sheridan Company offers an MP3 download (seven-single medley) as a premium for every...
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Problem 13-9 Sheridan Company offers an MP3 download (seven-single medley) as a premium for every 6 candy bar wrappers presented by customers together with $2.80. The candy bars are sold by the company to distributors for 30 cents each. The purchase price of each download code to the company is $2.55. In addition, it costs 50 cents to distribute each code. The results of the premium plan for the years 2017 and 2018 are as follows. (All purchases and sales are for cash.) 2017 2018 MP3 codes purchased Candy bars sold Wrappers redeemed 2017 wrappers expected to be redeemed in 2018 2018 wrappers expected to be redeemed in 2019 300,000 396,000 2,924,600 2,542,100 1,440,000 1,800,000 348,000 420,000 Indicate the amounts for each accounts, and classifications of the items related to the premium plan that would appear on the balance sheet and the income statement at the end of 2017 and 2018. Amount Classification Account Inventory of Premiums Premium Liability Premium Expense 2017 2018 Current Asset Current Liability Selling Expense s
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