On October 1,2016,Super Soup Corp

question 16

Essay

On October 1,2016,Super Soup Corp.began offering customers a Super Soup Spoon in return for 20 soup can labels.This offer expires on March 31,2017.The cost of each soup spoon is $1.50.Based on past experience,the company estimates that only 40% of the labels will be redeemed.During 2016,the company purchased 13,000 soup spoons.In 2016,it sold 600,000 cans of soup at $1.20 per can (the company uses the periodic inventory method).From these sales,180,000 labels were returned for redemption in 2016.
a.Prepare the journal entry to record the purchase of 12,000 soup spoons.
b.Prepare the journal entry to record the sale of 600,000 cans of soup.
c.Prepare the journal entry to estimate the premium expense for 2016.
d.Prepare the journal entry to record the redemption of 180,000 labels.

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