Candy Company offers a CD single as a premium for every 6 candy bar wrappers pre

ID: 2373432 • Letter: C

Question

Candy Company offers a CD single as a premium for every 6 candy bar

wrappers presented by customers together with $2.95. The candy bars are

sold by the company to distributors for 30 cents each. The purchase

price of each CD to the company is $2.70; in addition, it costs 50 cents

to mail each CD. The results of the premium plan for the years 2012 and

2013 are as follows. (All purchases and sales are for cash.)

(a)

Prepare the journal entries that should be made in 2012 and 2013 to

record the transactions related to the premium plan of the Sycamore

Candy Company. (If no entry is required,

select "No Entry" for the account titles and enter 0 for the amounts.

Credit account titles are automatically indented when amount is entered.

Do not indent manually.)

(b)

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 2012 and 2013.

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Sycamore

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