Customers receive a leash

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Reference no: EM13787718

Mott Co. includes one coupon in each bag of dog food it sells. In return for eight coupons, customers receive a leash. The leashes cost Mott $2.00 each. Mott estimates that 40% of the coupons will be redeemed. Data for 2010 and 2011 are as follows:

2010 2011

Bags of dog food sold 500,000 600,000

Leashes purchased 18,000 22,000

Coupons redeemed 120,000 150,000

The estimated liability for premiums at December 31, 2011 is $11,250.

$21,250.

$22,500.

$42,500.

Reference no: EM13787718

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