In packages of its products, Kristine Company includes coupons that may be presented at retail stores to obtain discounts on other Kristine Company products. Retailers are reimbursed for the face amount of coupons plus 20% of that amount for handling costs. Kristine honors requests for coupon redemption by retailers up to three months after the consumer expiration date. Kristine estimates that 80% of all coupons issued will ultimately be redeemed. Information relating to coupons issued by Kristine during 2020 is as follows: Consumer expiration date                                December 31, 2020 Total face amount of coupons issued                             5,000,000 Total payments to retailers as of December 31, 2020     3,600,000 What amount should Kristine report as a liability for unredeemed coupons at December 31, 2020? Group of answer choices A. 400,000 B. 2,400,000 C. 1,200,000 D. 1,400,000

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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In packages of its products, Kristine Company includes coupons that may be presented at retail stores to obtain discounts on other Kristine Company products. Retailers are reimbursed for the face amount of coupons plus 20% of that amount for handling costs. Kristine honors requests for coupon redemption by retailers up to three months after the consumer expiration date. Kristine estimates that 80% of all coupons issued will ultimately be redeemed. Information relating to coupons issued by Kristine during 2020 is as follows:

Consumer expiration date                                December 31, 2020

Total face amount of coupons issued                             5,000,000

Total payments to retailers as of December 31, 2020     3,600,000

What amount should Kristine report as a liability for unredeemed coupons at December 31, 2020?

Group of answer choices
A. 400,000
B. 2,400,000
C. 1,200,000
D. 1,400,000
 
 
 
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