Which of the statements is correct for the company coupons

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Problem 1: A company had sales of $1 million. Coupons in the amount of $1 per $10 in sales were given to paying customers. History has shown that 50% of all coupons are redeemed. Which of the following statements is correct?

Option 1: A provision for $50,000 must be recognized.

Option 2: A provision for $100,000 must be recognized.

Option 3: A provision for $1 million must be recognized.

Option 4: No provision is necessary.

Reference no: EM132612582

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