In packages of its products, PLACID, INC.includes coupons that may be presented atretail stores to obtaindiscounts on other Placid products. Retailersare reimbursed for the face amount ofcoupons redeemed plus10% of that amount for handling costs. Placidhonors requests for coupon redemption byretailers up to 3months after the consumer expiration date.Placid estimates that 60% of all couponsissued will ultimately beredeemed. Information relating to couponsissued by Placid during 2020 as follows:Consumer expiration date December 31, 2020Total payments to retailers as of December 31,2020 Php 165,000Liability for unredeemed coupons as ofDecember 31, 2020 Php 99,000Required:2. What is the total face amount of couponsissued by Placid, Inc. in 2020?

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Answered: 2020 Php 165,000 Liability for…

2020 Php 165,000 Liability for unredeemed coupons as of December 31, 2020 Php 99,000 Required: 2. What is the total face amount of coupons issued by Placid, Inc. in 2020?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

In packages of its products, PLACID, INC.
includes coupons that may be presented at
retail stores to obtain
discounts on other Placid products. Retailers
are reimbursed for the face amount of
coupons redeemed plus
10% of that amount for handling costs. Placid
honors requests for coupon redemption by
retailers up to 3
months after the consumer expiration date.
Placid estimates that 60% of all coupons
issued will ultimately be
redeemed. Information relating to coupons
issued by Placid during 2020 as follows:
Consumer expiration date December 31, 2020
Total payments to retailers as of December 31,
2020 Php 165,000
Liability for unredeemed coupons as of
December 31, 2020 Php 99,000
Required:
2. What is the total face amount of coupons
issued by Placid, Inc. in 2020?

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