In an effort to increase sales, DARIO Company inaugurated a sales promotional campaign on June 30, 2021. DARIO Company placed a coupon redeemable for a premium in each package of cereal sold. Each premium cost DARIO Company P20 and five coupons must be presented by a customer to receive  a premium. DARIO Company estimated that only 60% of the coupons issued will be redeemed. For the six months ended December 31, 2021 the following information is available. Package of cereal sold            Premiums purchased               Coupons redeemed 160,000                                               12,000                         40,000               What is the estimated liability for premiums on December 31, 2021 A. 160,000 B. 384,000 C. 224,000 D. 288,000

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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In an effort to increase sales, DARIO Company inaugurated a sales promotional campaign on June 30, 2021. DARIO Company placed a coupon redeemable for a premium in each package of cereal sold. Each premium cost DARIO Company P20 and five coupons must be presented by a customer to receive  a premium. DARIO Company estimated that only 60% of the coupons issued will be redeemed. For the six months ended December 31, 2021 the following information is available.

Package of cereal sold            Premiums purchased               Coupons redeemed

160,000                                               12,000                         40,000            

 

What is the estimated liability for premiums on December 31, 2021

A. 160,000
B. 384,000
C. 224,000
D. 288,000
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