Reference no: EM133067068
Questions -
Q1. In packages of its products, RAPTORS Company includes coupons that may be presented at retail stores to obtain discounts on other RAPTORS Company products.
Retailers are reimbursed for the face amount of the coupons redeemed plus 8% of that amount for handling costs. RAPTORS Company honors requests for coupon redemption by retailers up to 3 months after the consumer expiration date.
RAPTORS Company estimates that 25% of all coupons issued will ultimately be unredeemed. Information relating to coupons issued by RAPTORS Company during 2021 is as follows:
|
Consumer expiration dates
|
9/30/21
|
12/31/21
|
|
Face amount of coupons issued
|
P900,000
|
1,650,000
|
|
Redemption payments made
|
180,000
|
450,500
|
Required - What the liability for unredeemed coupons in the December 31, 2021 balance sheet?
Q2. 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?