LAXUS DREYAR Co. inaugurated a sales promotional campaign on September 1, 2020 in its desire to improve sales. LAXUS DREYAR Co. placed a coupon redeemable for a premium in each box sold. Each premium costs LAXUS P20 and five coupons must be presented by a customer to receive a premium. LAXUS estimated that only 70% of the coupon issued would be redeemed. For the four months ended December 31, 2020 the following information is available: Boxes sold |400, 000 Premiums purchased Coupons redeemed 30, 000 |100, 000 How much is the estimated liability for the premium claims outstanding at December 31, 2020?
LAXUS DREYAR Co. inaugurated a sales promotional campaign on September 1, 2020 in its desire to improve sales. LAXUS DREYAR Co. placed a coupon redeemable for a premium in each box sold. Each premium costs LAXUS P20 and five coupons must be presented by a customer to receive a premium. LAXUS estimated that only 70% of the coupon issued would be redeemed. For the four months ended December 31, 2020 the following information is available: Boxes sold |400, 000 Premiums purchased Coupons redeemed 30, 000 |100, 000 How much is the estimated liability for the premium claims outstanding at December 31, 2020?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:LAXUS DREYAR Co. inaugurated a
sales promotional campaign on
September 1, 2020 in its desire to
improve sales. LAXUS DREYAR Co.
placed a coupon redeemable for a
premium in each box sold. Each
premium costs LAXUS P20 and five
coupons must be presented by a
customer to receive a premium.
LAXUS estimated that only 70% of
the coupon issued would be
redeemed. For the four months
ended December 31, 2020 the
following information is available:
Boxes sold
|400, 000
Premiums
purchased
30, 000
Coupons
redeemed
|100, 000
How much is the estimated liability
for the premium claims outstanding
at December 31, 2020?
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