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In its December 2020 Balance Sheet what amount should mill report as estimated liability for coupons?

In its December 2020 Balance Sheet what amount should mill report as estimated liability for coupons?

FINANCIAL ACCOUNTING
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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Fluffy Custard Company offers its customers a silicone mixing spoon in exchange for 20 cents and 15 boxtops. The mixing spoon costs Fluffy Custard Company 75 cents, and the company estimates that customers will redeem 60 percent of the boxtops. The premium offer began January 2020, and Fluffy Custard Company purchase 15,000 silicone mixing spoons at 75 cents. Fluffy sold 200,000 packages of custard and no coupons were redeemed. In its December 2020 Balance Sheet what amount should mill report as estimated liability for coupons? А. 1600 В. 8000 C.4400 D. 6000
Transcribed Image Text:Fluffy Custard Company offers its customers a silicone mixing spoon in exchange for 20 cents and 15 boxtops. The mixing spoon costs Fluffy Custard Company 75 cents, and the company estimates that customers will redeem 60 percent of the boxtops. The premium offer began January 2020, and Fluffy Custard Company purchase 15,000 silicone mixing spoons at 75 cents. Fluffy sold 200,000 packages of custard and no coupons were redeemed. In its December 2020 Balance Sheet what amount should mill report as estimated liability for coupons? А. 1600 В. 8000 C.4400 D. 6000
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