Fido corp a small Canadian company reporting under ASPE include in each bag of dog food it sells in return three coupons customer receives a dog toy that the company had purchased for 1.20$ each. Fido experience indicates that 60 % of its coupons will be redeemed. During 2017100,000 bags of dog food were sold and 45,000 coupons were redeemed. Fido uses the expense approach to account for its premiums.

Required

Determine the premium expense to be reported in the income statement and the estimate liability for premiums on the financial position?