Marine City Company sells bags of coffee. Each bag includes one coupon; five coupons (plus $3.00) are redeemable for a personalized coffee mug. In 2017, Marine City purchased 9,000 mugs at $4.20 each and sold 60,000 bags of coffee that year at $6.00 per bag. Marine City estimated that 50% of the coupons would be redeemed. Actual coupons redeemed were 8,000 in 2017 and 13,000 in 2018.

The estimated liability for outstanding premiums on the12/31/17balance sheet is:

Select one:

a.$18,480

b.$7,200

c.$4,400

d.$5,280