Puppy Company includes one coupon in each bag of dog food it sells. In return for 4 coupons, customers receive a toy dog that the company purchases for $1 each. Puppy Companys experience indicates that 60% of the coupons will be redeemed. Information for 2012 is as follows: 2012 Bags of dog food sold 300,000

Toys Purchased 12,000

Coupons Redeemed. 40,000 The amount of estimated liability for premiums on the 12/31/12 balance sheet is

Select one:

a. $6,000

b. $18,000

c. $24,000

d. $35,000

e. $48,000