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Good Boy Dog Food includes one coupon in each bag of dog food it sells. In return for eight coupons, customers receive a leash. The
Good Boy Dog Food includes one coupon in each bag of dog food it sells. In return for eight coupons, customers receive a leash. The leashes cost Good Boy $4.00 each. Good Boy estimates that 45% of the coupons will be redeemed. Data for 2018 and 2019 are as follows:
2018 | 2019 | |
Bags of dog food sold | 500,000 | 600,000 |
Leashes purchased | 18,000 | 22,000 |
Coupons redeemed | 120,000 | 150,000 |
1. The premium expense for 2018
2. The estimated liability for premiums at December 31, 2018
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