The holcombe food company distributes coupons which the

Reference no: EM13596551

The Holcombe Food Company distributes coupons which the consumer may present to grocers for discounts on certain products of Holcombe. The grocers are reimbursed when they send the coupons to Holcombe. In Holcombe's experience, 50% of such coupons are redeemed, and generally one month elapses between the date a grocer receives a coupon from a consumer and the date Holcombe receives it. Last year, Holcombe issued two separate series of coupons as follows:

Issued on Total Value Expiration date Amt. disbursed as of 12/31
1/1 $ 125,000 6/30 $ 59,000
7/1 $ 180,000 12/31 $ 75,000

The only journal entries to date recorded debits to coupon expense and credits to cash of $134,000. Last year's December 31 balance sheet should include a liability for unredeemed coupons.

Reference no: EM13596551

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