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A company offers a cash rebate of $1 on each $4 package of batteries sold during 2007. Historically, 10% of customers mail in the rebate form. During 2007, 6,000,000 packages of batteries are sold, and 210,000 $1 rebates are mailed to customers. What is the rebate expense and liability, respectively, shown on the 2007 financial statements dated December 31?

a. $600,000; $600,000

b. $600,000; $390,000

c. $390,000; $390,000

d. $210,000; $390,000

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Accounting Basics, Accounting

Category:- Accounting Basics
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