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No Doubt Company includes one coupon in each box of soap powder that it packs and 10 coupons are redeemable for a premium (a kitchen utensil). In 2007, No Doubt Company purchased 8,800 premiums at 80 cents each an sold 110,000 boxes of soap powder at $3.30 per box. 44,000 coupons were presented for redemption in 2007. It is estimated that 60 percent of the coupons will eventually be presented for redemption.

Prepare all the entries tat woud be made relative to the sale of soap powder and to the premium plan in 2007.

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Solution Summary

The solution explains all the journal entries relating to placing a coupon for redemption in products.

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No Doubt Company includes one coupon in each box of soap powder that it packs and 10 coupons are redeemable for a premium (a kitchen utensil). In 2007, No Doubt Company purchased 8,800 premiums at 80 cents each an sold 110,000 boxes of soap powder at $3.30 per box. 44,000 coupons were ...

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