What is jungs estimated liability for unredeemed premiums, Ask an Expert

Accounting

The Jung Company includes a premium in each box of its cereal. For four premiums plus $2.00, customers are entitled to a plastic doll that costs Jung $4.50 each. Jung expects 60% of the premiums to be redeemed. In 2010, Jung sold 500,000 boxes of cereal and distributed 25,000 dolls.

What is Jung's estimated liability for unredeemed premiums on December 31, 2010?

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M947032

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