During the year, L&M Leather Goods sold 1,080,000 reversible belts under a new sales promotional program. Each belt carried one coupon, which entitles the customer to a $4.80 cash rebate. L&M estimates that 77% of the coupons will be redeemed, even though only 507,000 coupons had been processed during the year. At December 31, L&M should report a liability for unredeemed coupons of: A. $831,600 B. $2,433,600 C. $3,991,680 D. $1,558,080

Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter7: Budgeting
Section: Chapter Questions
Problem 11EB: Gear Up Co. pays 65% of its purchases in the month of purchase, 30% in the month after the purchase,...
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Accounting during the year, l&m need help

During the year, L&M Leather Goods sold 1,080,000
reversible belts under a new sales promotional
program. Each belt carried one coupon, which entitles
the customer to a $4.80 cash rebate. L&M estimates
that 77% of the coupons will be redeemed, even
though only 507,000 coupons had been processed
during the year. At December 31, L&M should report
a liability for unredeemed coupons of:
A. $831,600
B. $2,433,600
C. $3,991,680
D. $1,558,080
Transcribed Image Text:During the year, L&M Leather Goods sold 1,080,000 reversible belts under a new sales promotional program. Each belt carried one coupon, which entitles the customer to a $4.80 cash rebate. L&M estimates that 77% of the coupons will be redeemed, even though only 507,000 coupons had been processed during the year. At December 31, L&M should report a liability for unredeemed coupons of: A. $831,600 B. $2,433,600 C. $3,991,680 D. $1,558,080
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