Question
In an effort to increase sales, RazR Co. inaugurated a sales promotional campaign on June 30, 2023, whereby RazR placed a coupon in each package
In an effort to increase sales, RazR Co. inaugurated a sales promotional campaign on June 30, 2023, whereby RazR placed a coupon in each package of razors sold, the coupons being redeemable for a premium. Each premium costs RazR $.88 and 4 coupons must be presented by a customer to receive a premium. RazR estimated that only 40% of the coupons issued will be redeemed. For the six months ended December 31, 2023, the following information is available:
Packages of Razors Sold = 400,000
Premiums purchased = 50,000
Coupons redeemed = 150,000
What is the estimated liability for premium claims outstanding at December 31, 2023?
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