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Situation 2: In packages of its products, Pina Inc. includes coupons that may be presented at retail stores to obtain discounts other Pina products. Retailers
Situation 2: In packages of its products, Pina Inc. includes coupons that may be presented at retail stores to obtain discounts other Pina products. Retailers are reimbursed for the face amount of coupons redeemed plus 10% of that amount for handling costs. Pina honours requests for coupon redemption by retailers up to three months after the consumer expiration date printed on the coupon. Pina estimates that 60% of all coupons issued will eventually be redeemed. Information relating to coupons Issued by Pina during 2023 (the first year of the promotion) is as follows: Consumer expiration date 12/31/23 Total face amount of coupons issued $768,000 Total payments to retailers as at 12/31/23 $316,800 (a) What amount should Pina report as a liability for unredeemed coupons at December 31, 2023? Liability for unredeemed coupons $ (b) What amount of premium expense should Pina report on its 2023 income statement? Premium expense $
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