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P1-114: CURRENT LIABILITIES EKWerce#1 2ND SENERTER (PRELIM TERM) Noven Inc., places a coupon in each box of its product. Customers may send in ten coupons and P3.00 ompany will send them a CD.Sufficient CDs were 260,000 boxes were sold. It was estimated that a total of 5% of the coupo 8,000 coupons were redeemed. purchased at P5.40 aplece. During 2017, ns willbe redeemed. In 2017, 1. How much is the premium expense for the year 2017? a. 63,000 b. 34,020 c. 15,120 d. 10,800 2. How much is the liability for premiums outstanding as of December 31, 2017? c. 24,300 d. 43,200 a. 15,120 b. 10,800 Sam Company started business in 2017. It sells printers with a two-year warranty Sam estimates its Warranty cost as a percentage of peso sales) Based on past experience, it is estimated that 2will be repaired during the first year of warranty and 6% will be repaired during the second year of warranty. In 2017 and 2018, Sam company was able to sell 700 units and 800 units, respectively at a selling price of P2,000 per unit. The company also incurred actual repair costs of P9 and P80,000 in 2017 and 2018, respectively. 3. What amount should Sam report as warranty expense in 2018? a. 28,000 b, 112,000 c. 128,000 d. 90,000

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