During 2016,Deluxe Leather Goods sold 800,000 reversible belts under a new sales promotional program.Each belt carried one coupon,which entitles the customer to a $5.00 cash rebate.Deluxe estimates that 70% of the coupons will be redeemed,even though only 350,000 coupons had been processed during 2016.At December 31,2016,Deluxe should report a liability for unredeemed rebates of:

Question

Quizplus · Accepted Answer

Deluxe estimates 70% of 800,000 coupons will be redeemed, which is 560,000 coupons. Since 350,000 have been redeemed, 210,000 are still expected to be redeemed. The liability is 210,000 coupons x $5 = $1,050,000.

During 2016,Deluxe Leather Goods Sold 800,000 Reversible Belts Under a New