1. The Puncher Co. launched a sales promotional campaign on June 30, 2006. For every ten
empty packs returned to Puncher, customers will receive an attractive food container. The
company estimates that only 30% of the packs reaching the market will be redeemed.
Additional information are as follows:
Units Amount
Sales of food packs 3,000,000 P9,000,000
Food containers purchased 60,000 180,000
Prizes distributed to customers 37,000
At the end of the year, Puncher recognized a liability equal to the estimated cost of potential
prizes outstanding.
What is the amount of this estimated liability?
a. 69,000 c. 159,000
b. 90,000 d. 180,000
2. Green Company has 2,000,000 shares of ordinary shares outstanding on December 31, 2005.
An additional 100,000 shares are issued on April 1, 2006 and 240,000 more on September 1.
