Willy Candy Company offers a coffee mug as a premium for every ten 50-cent candy bar wrappers presented by customers together with P1.00. The purchase price of each mug to the company is 90 cents; in addition it costs 60 cents to mail each mug. The results of the premium plan for the years 2019 and 2020 are as follows:

	2019	2020
Coffee mugs purchased	480,000	400,000
Candy bars sold	3,750,000	4,500,000
Wrappers redeemed	1,900,000	2,800,000
2019 wrappers expected to be redeemed in 2020	1,300,000
2020 wrappers expected to be redeemed in 2021		1,800,000

REQUIRED: 1.) The premium expense for the year ended December 31, 2020 is a. 690,000 b. 230,000 c. 165,000 d. 495,000 2.) The estimated liability for premiums as of December 31, 2020 is

a.)165,000 b.)270,000 c.)162,000 d.)90,000 3.) The inventory of premium mugs as of December 31, 2020 is

a.)540,000 b.)423,000 c.)410,000 d.)369,000