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Question - FlipSide Ventures is a green company engaged in the manufacture of bottled soda. The container for the soda costing P8 each is secured by a deposit of P10 added to the sales price.
Outstanding liability for deposits on these containers as of the beginning of the year amounted to P1,500,000. During the year, 100,000 of the containers associated with this outstanding amount were returned by the customers.
In addition, 100,000 refillable containers were sold to new customers during the current year. Of these, 25% were returned in the same year.
Required -
1. Determine outstanding liability for deposits on refillable containers as of the end of the current year.
2. Suppose all unreturned containers as of the end of the current year will be written off because the company expects that these will no longer be returned, how much is the gain/loss due to the write-off?
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