M includes one coupon in each bag of dog food it sells. The coupons do not have an expiration date. In exchange for five coupons, M sends customers a leash. The leashes cost M $2 each. M estimates customers will redeem 20% of the coupons. Data for 2018 and 2019 follows: 2018 2019 Bags of dog food sold 650,000 740,000 Leashes purchased 30,000 27,000 Coupons redeemed 100,000 120,000 What is M’s estimated coupon/leash premium expense for 2018? What is M’s estimated coupon/leash premium liability at December 31, 2018? What is M’s estimated coupon/leash premium expense for 2019? What is M’s estimated coupon/leash premium liability at December 31, 2019?
M includes one coupon in each bag of dog food it sells. The coupons do not have an expiration date. In exchange for five coupons, M sends customers a leash. The leashes cost M $2 each. M estimates customers will redeem 20% of the coupons. Data for 2018 and 2019 follows:
2018 2019
Bags of dog food sold 650,000 740,000
Leashes purchased 30,000 27,000
Coupons redeemed 100,000 120,000
- What is M’s estimated coupon/leash premium expense for 2018?
- What is M’s estimated coupon/leash premium liability at December 31, 2018?
- What is M’s estimated coupon/leash premium expense for 2019?
- What is M’s estimated coupon/leash premium liability at December 31, 2019?
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