In packages of its products, Taurus Company includes coupons that may be presented at retail stores to obtain discounts on other Taurus Company products. Retailers are reimbursed for the face amount of coupons plus 20% of that amount for handling costs. Taurus honors requests for coupon redemption by retailers up to three months after the consumer
In packages of its products, Taurus Company includes coupons that may be presented at retail stores to obtain discounts on other Taurus Company products. Retailers are reimbursed for the face amount of coupons plus 20% of that amount for handling costs. Taurus honors requests for coupon redemption by retailers up to three months after the consumer expiration date. Taurus estimates that 80% of all coupons issued will ultimately be redeemed. Information relating to coupons issued by Taurus during 2019 is as follows:
|
Consumer expiration date |
|
December 31, 2019 |
|
Total face amount of coupons issued |
|
P7,500,000 |
|
Total payments to retailers as of December 31, 2019 |
|
P5,400,000 |
What amount should Taurus report as a liability for unredeemed coupons at December 31, 2019?
- 2,100,000 3,600,000
- 1,800,000 600,000
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