The entity has a long -term line of credit Matthew Co. includes one coupon in each bag of dog food it sells. In return for eight coupons, customers receive a leash. The leashes cost Matthews P3 each. Matthew estimates that 45 percent of the coupons will be redeemed. Data for 2020 and 2021 are as follows: 2020 2021 Bags of dog food sold Leashes purchased Coupons redeemed 500,000 600,000 18,000 22,000 120,000 150,000

The entity has a long -term line of credit Matthew Co. includes one coupon in each bag of dog food it sells. In return for eight coupons, customers receive a leash. The leashes cost Matthews P3 each. Matthew estimates that 45 percent of the coupons will be redeemed. Data for 2020 and 2021 are as follows: 2020 2021 Bags of dog food sold Leashes purchased Coupons redeemed 500,000 600,000 18,000 22,000 120,000 150,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

The premium liability at December 31, 2020 is

A.39,375.

B.54,000.

C.45,000.

D.37,500

The entity has a long -term line of credit
Matthew Co. includes one coupon in each bag of dog food it sells. In return for eight
coupons, customers receive a leash. The leashes cost Matthews P3 each. Matthew
estimates that 45 percent of the coupons will be redeemed.
Data for 2020 and 2021 are as follows:
2020
2021
Bags of dog food sold
Leashes purchased
Coupons redeemed
500,000
600,000
18,000
22,000
120,000
150,000

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