Mott Co. includes one coupon in each bag of dog food it sells. In return for eight coupons,
customers receive a leash. The leashes cost Mott $2.00 each. Mott estimates that 40 percent of
the coupons will be redeemed. Data for 2010 and 2011 are as follows:
The estimated liability for premiums at December 31, 2010 is
A) $7,500.
B) $10,000.
C) $17,500.
D) $20,000.
Solution
Mott Co. includes one coupon in each bag of dog food it sells. In return for eight coupons,
customers receive a leash. The leashes cost Mott $2.00 each. Mott estimates that 40 percent of
the coupons will be redeemed. Data for 2010 and 2011 are as follows:
The estimated liability for premiums at December 31, 2010 is
A) $7,500.
B) $10,000.
C) $17,500.
D) $20,000..
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Mott Co. includes one coupon in each bag of dog food it sells. In re.pdf
1. Mott Co. includes one coupon in each bag of dog food it sells. In return for eight coupons,
customers receive a leash. The leashes cost Mott $2.00 each. Mott estimates that 40 percent of
the coupons will be redeemed. Data for 2010 and 2011 are as follows:
The estimated liability for premiums at December 31, 2010 is
A) $7,500.
B) $10,000.
C) $17,500.
D) $20,000.
Solution
Mott Co. includes one coupon in each bag of dog food it sells. In return for eight coupons,
customers receive a leash. The leashes cost Mott $2.00 each. Mott estimates that 40 percent of
the coupons will be redeemed. Data for 2010 and 2011 are as follows:
The estimated liability for premiums at December 31, 2010 is
A) $7,500.
B) $10,000.
C) $17,500.
D) $20,000.
