Palmer Frosted Flakes Company offers its customers a pottery cereal bowl if they send in 3 boxtops from Palmer Frosted Flakes boxes and P2. The company estimates that 60% of the boxtops will be redeemed. In 2020, the company sold 675,000 boxes of Frosted Flakes and customers redeemed 330,000 boxtops receiving 110,000 bowls. If the bowls cost Palmer Company P6 each, how much liability for outstanding premiums should be recorded at the end of 2020? a. P540,000 c. P150,000 b. P100,000 d. P276,000
Palmer Frosted Flakes Company offers its customers a pottery cereal bowl if they send in 3 boxtops from Palmer Frosted Flakes boxes and P2. The company estimates that 60% of the boxtops will be redeemed. In 2020, the company sold 675,000 boxes of Frosted Flakes and customers redeemed 330,000 boxtops receiving 110,000 bowls. If the bowls cost Palmer Company P6 each, how much liability for outstanding premiums should be recorded at the end of 2020? a. P540,000 c. P150,000 b. P100,000 d. P276,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Palmer Frosted Flakes Company offers its customers a pottery cereal bowl if they send in 3 boxtops from Palmer Frosted Flakes
boxes and P2. The company estimates that 60% of the boxtops will be redeemed. In 2020, the company sold 675,000 boxes
of Frosted Flakes and customers redeemed 330,000 boxtops receiving 110,000 bowls. If the bowls cost Palmer Company P6
each, how much liability for outstanding premiums should be recorded at the end of 2020?
a. P540,000 c. P150,000
b. P100,000 d. P276,000
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