ABC Co. distributed coupons to promote new products. The entity mailed 100,000 coupons for P45 off each box of cereal purchased on October 1, 2019. The entity expected 12,000 of these coupons to be redeemed before the December 31, 2019 expiration date. It takes 30 days from the redemption date for the entity to receive the coupons from the retailers. The entity reimbursed the retailers an additional P5 for each coupon redeemed. The entity had paid retailers P250,000 related to these coupons and had 5,000 coupons on hand had not been processed for payment. What amount should be reported as liability for coupons on December 31, 2019? A) 250,000 B) 225,000 290,000 350,000
ABC Co. distributed coupons to promote new products. The entity mailed 100,000 coupons for P45 off each box of cereal purchased on October 1, 2019. The entity expected 12,000 of these coupons to be redeemed before the December 31, 2019 expiration date. It takes 30 days from the redemption date for the entity to receive the coupons from the retailers. The entity reimbursed the retailers an additional P5 for each coupon redeemed. The entity had paid retailers P250,000 related to these coupons and had 5,000 coupons on hand had not been processed for payment. What amount should be reported as liability for coupons on December 31, 2019? A) 250,000 B) 225,000 290,000 350,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:ABC Co. distributed coupons to promote new products. The
entity mailed 100,000 coupons for P45 off each box of
cereal purchased on October 1, 2019.
The entity expected 12,000 of these coupons to be
redeemed before the December 31, 2019 expiration date.
It takes 30 days from the redemption date for the entity to
receive the coupons from the retailers. The entity
reimbursed the retailers an additional P5 for each coupon
redeemed.
The entity had paid retailers P250,000 related to these
coupons and had 5,000 coupons on hand had not been
processed for payment.
What amount should be reported as liability for coupons on
December 31, 2019?
A) 250,000
B) 225,000
c) 290,000
(D) 350,000
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