How much is the estimated liability as of December

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Question - In effort to increase sales, a company initiated a sales promotion campaign on June 20, 2015, whereby a coupon was placed in each package of the product, the coupons are redeemable for a premium. Each premium costs the company P0.50 and five coupons must be presented by customer to receive a premium. The company estimated that only 60 percent of coupons issued will be redeemed. For the six months ended December 2015, the following information is available:

Packages sold (in units) 400,000; Premiums Purchased 30,000; Coupons Redeemed 100,000

Requirements -

a. How much is the premium expense in 2015?

b. How much is the estimated liability as of December 31, 2015?

Reference no: EM133038458

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