Kent Co. includes one coupon in each bag of dog food it sells. In return for eight coupons, customers receive a leash. The leashes cost Kent $2.00 each. Kent estimates that 40 percent of the coupons will be redeemed. Data for 2008 and 2009 are as follows:

-The estimated liability for premiums at December 31, 2008 is

Question

Kent Co. includes one coupon in each bag of dog food it sells. In return for eight coupons, customers receive a leash. The leashes cost Kent $2.00 each. Kent estimates that 40 percent of the coupons will be redeemed. Data for 2008 and 2009 are as follows:
 
-The estimated liability for premiums at December 31, 2008 is

Quizplus · Accepted Answer

[(200,000 - 120,000) ÷ 8] × $2 = $20,000.

Kent Co Includes One Coupon in Each Bag of Dog Food