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?

Question 3 options:

A provision for $50,000 must be recognized.

A provision for $100,000 must be recognized.

A provision for $1 million must be recognized.

No provision is necessary.