Teal Company offers an MP3 download (seven-single medley) as a premium for every 5 candy bar...

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Accounting

Teal Company offers an MP3 download (seven-single medley) as apremium for every 5 candy bar wrappers presented by customerstogether with $2.90. The candy bars are sold by the company todistributors for 30 cents each. The purchase price of each downloadcode to the company is $2.65. In addition, it costs 50 cents todistribute each code. The results of the premium plan for the years2017 and 2018 are as follows. (All purchases and sales are forcash.)
2017
2018
MP3 codes purchased 300,000 396,000
Candy bars sold 2,803,800 2,967,500
Wrappers redeemed 1,440,000 1,800,000
2017 wrappers expected to be redeemed in 2018 348,000
2018 wrappers expected to be redeemed in 2019 420,000
Prepare the journal entries that should be made in 2017 and 2018to record the transactions related to the premium plan of the TealCompany. (If no entry is required, select "No Entry"for the account titles and enter 0 for the amounts. Credit accounttitles are automatically indented when amount is entered. Do notindent manually. Round answers to 0 decimal places, e.g.1,525.)
Indicate the amounts for each accounts, and classifications ofthe items related to the premium plan that would appear on thebalance sheet and the income statement at the end of 2017 and2018.

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inventory of premium 300000265 795000 cash 795000 to record the premium of inventory cash 2803800030 841140 sales revenue 841140 to record sales 14400005 288000 cash 288000290050 691200 premium expenses288000265050290 72000 inventory of premium 288000265 763200 to record exp of sale premium See Answer

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Transcribed Image Text

Teal Company offers an MP3 download (seven-single medley) as apremium for every 5 candy bar wrappers presented by customerstogether with $2.90. The candy bars are sold by the company todistributors for 30 cents each. The purchase price of each downloadcode to the company is $2.65. In addition, it costs 50 cents todistribute each code. The results of the premium plan for the years2017 and 2018 are as follows. (All purchases and sales are forcash.)20172018MP3 codes purchased300,000396,000Candy bars sold2,803,8002,967,500Wrappers redeemed1,440,0001,800,0002017 wrappers expected to be redeemed in 2018348,0002018 wrappers expected to be redeemed in 2019420,000Prepare the journal entries that should be made in 2017 and 2018to record the transactions related to the premium plan of the TealCompany. (If no entry is required, select "No Entry"for the account titles and enter 0 for the amounts. Credit accounttitles are automatically indented when amount is entered. Do notindent manually. Round answers to 0 decimal places, e.g.1,525.)Indicate the amounts for each accounts, and classifications ofthe items related to the premium plan that would appear on thebalance sheet and the income statement at the end of 2017 and2018.

	2017	2018
MP3 codes purchased	300,000	396,000
Candy bars sold	2,803,800	2,967,500
Wrappers redeemed	1,440,000	1,800,000
2017 wrappers expected to be redeemed in 2018	348,000
2018 wrappers expected to be redeemed in 2019		420,000