What the liability for Unredeemed Coupons

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Q1. WARRIORS Company sold 3,000,000 boxes of strawberry-cheese pie mix under a new sales promotional program. Each box contains one coupon, in which 10 coupons, submitted with P4 entitles the customer to a baking pan. WARRIORS Company pays P12 per pan and P1.50 for handling and shipping. WARRIORS Company estimates that 80% of the coupons will be redeemed, even though only 1,350,000 coupons had been processed during 2021. What the liability for Unredeemed Coupons in its December 31, 2021?

Q2. TRAILBLAZERS Company sells goods with a warranty under which customers are covered for the cost of repairs of any manufacturing defects within 12 months after purchase. If minor defects were detected in all products sold, repair cost is around P300,000 and if major defects are detected on all products sold repair cost is around P1,500,000. TRAILBLAZERS Company's past experience and future expectations indicate that 70% will have no defects; while 25% will have minor defects and 5% will have major defects. What the expected value of the loss?

Reference no: EM133066868

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