Johnson and Johnson (J&J) is a public company with a calendar year end. J&J manufactures toothpaste
Johnson and Johnson (J&J) is a public firm with a calendar 12 months finish. J&J manufactures toothpaste that's in the end bought and utilized by shoppers. The availability chain consists of the next:· J&J sells its toothpaste to a wholesaler;· Wholesaler sells the toothpaste to a retailer; and· Retailer sells the toothpaste to a shopper.J&J launches a brand new toothpaste, Shiny Enamel, on September 1, 2012. In reference to this launch, J&J developed a complete advertising and marketing marketing campaign. A part of the marketing campaign entails releasing roughly 500,000 coupons in Sunday newspapers in places during which the brand new toothpaste will probably be bought. When a shopper redeems the coupon upon buying the product from a retailer, the worth charged is decreased by $1. This retailer sends the coupon to a clearinghouse. J&J reimburses the retailer for the low cost supplied to the shopper.J&J discontinues the coupons for this product on October 1, 2012. The coupons expire on October 1, 2013. J&J has not supplied coupons on toothpaste earlier than, nor have they supplied coupons with a one-year expiration interval. They've, nevertheless, supplied coupons with a six-month expiration date on different merchandise. These coupons had a 1.5 p.c redemption charge. J&J estimates that roughly 2 p.c of the toothpaste coupons will probably be redeemed by clients previous to the expiration date. Nonetheless, J&J doesn't have any information on the redemption charge for coupons supplied on toothpaste. J&J has bought and acknowledged income for over $2,000,000 of Shiny Enamel into the availability chain by September 30, 2012.J&J is contemplating the way it ought to account for the Shiny Enamel coupon drop that came about on October 1, 2012. In doing so, J&J asks to your assist. Put together a memo addressing the next questions. Base your evaluation of those questions on the related authoritative literature and focus on the help in that literature to your conclusions. You should definitely cite the related elements of the Condification in your discussions. Citations aren't required for journal entries.1. What are the accounting situation(s) and the related elements of the authoritative literature?2. When ought to J&J acknowledge the results of the Shiny Enamel coupon drop on its monetary statements?three. What's the greenback quantity of the impact of Shiny Enamel coupon drop on J&J’s monetary statements?four. What would represent “adequate evidence” to help J&J’s anticipated redemption charge of two p.c?5. What are the accounting implications if J&J’s estimated redemption charge modifications to 1.5 p.c at a later time limit?6. How ought to the results of the Shiny Enamel coupon drop be mirrored within the revenue assertion?7. What are the required journal entries?