Exhibit 13-3 Paul Company includes three coupons in each package of crackers it sells.In exchange for 20 coupons, a customer will receive a cheese plate.Paul estimates that 30% of the coupons will be redeemed.In 2010, Paul sold 4, 000, 000 boxes of crackers and purchased 150, 000 cheese plates at $2.50 each.During the year, 970, 000 coupons were redeemed.
-
Refer to Exhibit 13-3.What amount should Paul report as estimated premium claims outstanding at December 31, 2010?
A)$121, 250
B)$328, 750
C)$450, 000
D)$500, 000

Question

Quizplus · Accepted Answer

The Answer of Exhibit 13-3 Paul Company includes three coupons in each package of crackers it sells.In exchange for 20 coupons, a customer will receive a cheese plate.Paul estimates that 30% of the coupons will be redeemed.In 2010, Paul sold 4, 000, 000 boxes of crackers and purchased 150, 000 cheese plates at $2.50 each.During the year, 970, 000 coupons were redeemed.
-
Refer to Exhibit 13-3.What amount should Paul report as estimated premium claims outstanding at December 31, 2010?
A)$121, 250
B)$328, 750
C)$450, 000
D)$500, 000

Exhibit 13-3 Paul Company Includes Three Coupons in Each Package