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E13-11 (Warranties) Sheryl Crow Equipment Company sold 500
Rollomatics during 2014 at $6,000 each. During 2014, Crow spent
$20,000 servicing the 2-year warranties that accompany the
Rollomatic. All applicable transactions are on a cash basis.
E13-12 (Premium Entries) No Doubt Company includes 1 coupon in
each box of soap powder that it packs, and 10 coupons are
redeemable for a premium (a kitchen utensil). In 2014, No Doubt
Company purchased 8,80 0 premiums at 80 cents each and sold
110,000 boxes of soap powder at $3.30 per box; 44,000 coupons were
presented for redemption in 2014. It is estimated that 60% of the
coupons will eventually be presented for redemption.
P13-9 (Premium Entries and Financial Statement Presentation)
Sycamore Candy Company offers an MP3 download (seven-single
medley) as a premium for every five candy bar wrappers presented
by customers together with $2.50. 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 $2.25. In addition, it costs 50
cents to distribute each code. The results of the premium plan for