Eres Hermoso Company includes one coupon in each box of laundry soap it sells. A towel is offered as a premium to customers who send in 10 coupons and a remittance of P20.                                                                                       2022                            2023             Boxes of soap sold                                         1,000,000                    1,500,000             Number of towels purchased at P100 each   25,000                         40,000             Coupons redeemed                                        200,000                       350,000                 The experience of the entity indicates that only 30% of the coupons will be redeemed. What is the estimated liability for premiums on December 31, 2023?         Eres Hermoso Company includes one coupon in each box of laundry soap it sells. A towel is offered as a premium to customers who send in 10 coupons and a remittance of P20.                                                                                       2022                            2023             Boxes of soap sold                                         1,000,000                    1,500,000             Number of towels purchased at P100 each   25,000                         40,000             Coupons redeemed                                        200,000                       350,000               The experience of the entity indicates that only 30% of the coupons will be redeemed. What is the estimated liability for premiums on December 31, 2023? 1,600,000   2,800,000  2,000,000  6,000,000

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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  Eres Hermoso Company includes one coupon in each box of laundry soap it sells. A towel is offered as a premium to customers who send in 10 coupons and a remittance of P20.

 

                                                                                    2022                            2023

            Boxes of soap sold                                         1,000,000                    1,500,000

            Number of towels purchased at P100 each   25,000                         40,000

            Coupons redeemed                                        200,000                       350,000

 

 

            The experience of the entity indicates that only 30% of the coupons will be redeemed. What is the estimated liability for premiums on December 31, 2023?

        Eres Hermoso Company includes one coupon in each box of laundry soap it sells. A towel is offered as a premium to customers who send in 10 coupons and a remittance of P20.

 

                                                                                    2022                            2023

            Boxes of soap sold                                         1,000,000                    1,500,000

            Number of towels purchased at P100 each   25,000                         40,000

            Coupons redeemed                                        200,000                       350,000

 

            The experience of the entity indicates that only 30% of the coupons will be redeemed. What is the estimated liability for premiums on December 31, 2023?

1,600,000

  2,800,000

 2,000,000

 6,000,000

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