38. During the current year, Responsibility Company inserted in each package sold a coupon offering P300 off the purchase price of a particular brand of product when the coupon is presented to retailers. The retailers are reimbursed for the face amount of coupons plus 10% for handling. Previous experience indicates that 30% of coupons will be redeemed. During the current year, Responsibility issued coupons with face amount of P10,000,000 and total payments to retailers amounted to P2,000,000. What is the amount of coupon liability at the end of the year?
38. During the current year, Responsibility Company inserted in each package sold a coupon offering P300 off the purchase price of a particular brand of product when the coupon is presented to retailers. The retailers are reimbursed for the face amount of coupons plus 10% for handling. Previous experience indicates that 30% of coupons will be redeemed. During the current year, Responsibility issued coupons with face amount of P10,000,000 and total payments to retailers amounted to P2,000,000. What is the amount of coupon liability at the end of the year?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:38. During the current year, Responsibility Company inserted in each package sold a coupon
offering P300 off the purchase price of a particular brand of product when the coupon is
presented to retailers.
The retailers are reimbursed for the face amount of coupons plus 10% for handling.
Previous experience indicates that 30% of coupons will be redeemed.
During the current year, Responsibility issued coupons with face amount of P10,000,000
and total payments to retailers amounted to P2,000,000.
What is the amount of coupon liability at the end of the year?
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