Griffin Company mails coupons to consumers which may be presented at a stated expiration date at retail food stores to obtain discounts on certain Griffin products. Retailers are reimbursed for the face value of coupons redeemed, plus 10% of coupon face value as compensation for handling costs. The entity honours requests for coupon redemption by retailers received up to three months after the consumer expiration date. Based on experience, 60% of the coupons issued ultimately are redeemed. The entity provided the following information with respect to two separate series of coupons issued during 2020: Series A Series B Consumer expiration date September 30, 2020 December 31, 2020 Total face value of coupons issued 1,500,000 3,000,000 Total payments to retailers on December 31, 2020 907,500 607,500 What amount should be reported as liability for unredeemed coupons on December 31, 2020
Griffin Company mails coupons to consumers which may be presented at a stated expiration date at retail food stores to obtain discounts on certain Griffin products. Retailers are reimbursed for the face value of coupons redeemed, plus 10% of coupon face value as compensation for handling costs.
The entity honours requests for coupon redemption by retailers received up to three months after the consumer expiration date. Based on experience, 60% of the coupons issued ultimately are redeemed.
The entity provided the following information with respect to two separate series of coupons issued during 2020:
|
|
Series A |
Series B |
|
Consumer expiration date |
September 30, 2020 |
December 31, 2020 |
|
Total face value of coupons issued |
1,500,000 |
3,000,000 |
|
Total payments to retailers on December 31, 2020 |
907,500 |
607,500 |
|
|
|
|
What amount should be reported as liability for unredeemed coupons on December 31, 2020?
Step by step
Solved in 2 steps
