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Thermal Cereal is offering a promotion where 4 cereal box tops and $2 gets a customer a superhero cape. The company purchases 24,000 promotional capes
Thermal Cereal is offering a promotion where 4 cereal box tops and $2 gets a customer a superhero cape. The company purchases 24,000 promotional capes for $8 each and estimates that 40% of box tops will be redeemed for the promotion. If customers purchase 72,000 boxes of cereal at $4.50 each and 22,000 box tops are redeemed in 20X1, how much premium liability will be recorded in the December 31, 20X1 adjusting entry?
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