Art Company started a new promotional program. For every 10 box tops returned, customers receive a basketball. The entity estimated that only 60% of the box tops reaching the market would be redeemed.   Sales of product 100,000 units P30,000,000 Basketballs purchased 5,500 units P4,125,000 Basketballs distributed 4,000   What amount should be reported as year-end estimated liability associated with this promotion? A. 3,000,000 B. 2,500,000 C. 2,000,000 D. 1,500,000

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Art Company started a new promotional program. For every 10 box tops returned, customers receive a basketball. The entity estimated that only 60% of the box tops reaching the market would be redeemed.

 

Sales of product 100,000 units P30,000,000

Basketballs purchased 5,500 units P4,125,000

Basketballs distributed 4,000

 

What amount should be reported as year-end estimated liability associated with this promotion?

A. 3,000,000
B. 2,500,000
C. 2,000,000
D. 1,500,000

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