Ben and Co. inaugurated a sales promotion campaign on May 31, 2019, whereby Ben placed a coupon in each package of chocolate sold, the coupons being redeemable for a premium. Each premium costs Ben P 50 and a customer to receive a coupon must present five coupons. Ben estimated that only 60 % of the coupon issued would be redeemed. For the seven months ended Dec. 3, 2019,
Ben and Co. inaugurated a sales promotion campaign on May 31, 2019, whereby Ben placed a coupon in each package of chocolate sold, the coupons being redeemable for a premium. Each premium costs Ben P 50 and a customer to receive a coupon must present five coupons. Ben estimated that only 60 % of the coupon issued would be redeemed. For the seven months ended Dec. 3, 2019,
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter7: Inventories: Cost Measurement And Flow Assumptions
Section: Chapter Questions
Problem 3MC: During 2019, R Corp., a manufacturer of chocolate candies, contracted to purchase 100,000 pounds of...
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Ben and Co. inaugurated a sales promotion campaign on May 31, 2019, whereby Ben placed a coupon in each package of chocolate sold, the coupons being redeemable for a premium. Each premium costs Ben P 50 and a customer to receive a coupon must present five coupons. Ben estimated that only 60 % of the coupon issued would be redeemed. For the seven months ended Dec. 3, 2019, the following information is available: Packages of chocolates sold 400,000 Premium purchased 30,000 Coupons redeemed 100,000 How much is the estimated liability for premium claims outstanding at Dec. 31, 2019? *
A.P 180,000
B.P 140,000
C.P 240,000
D.P 100,000
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