A cereal company issues coupons that can be exchanged for boxes of cereal. It issues...
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Accounting
A cereal company issues coupons that can be exchanged for boxes of cereal. It issues two million coupons that promise the retailer who redeems the coupons $1 per coupon. The probability of redemption of any one coupon is 10%. What is the amount of the liability that the company recognizes?
a.
$2,000
b.
$20,000
c.
$100,000
d.
$200,000
e.
$2,000,000
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