Question

In 2019, Keith Moon Inc. offers a $20 cash rebate coupon to customers who purchased one of its new line of products.  Moon sold 10,000 of these products during the year. By the end of 2019, 7,600 of the rebates had been claimed, and 7,100 had been paid.  Moon’s historical experience with such rebates indicates that 85% of customers claim the rebates. Customers have until June 30, 2020 to claim their rebates.
_____ 17. The total promotion rebate expense Moon should report on its 2019 income statement is:
  A) $142,000        B) $152,000        C) $170,000        D) $200,000
_____ 18. The promotion rebate liability Moon would report on its December 31, 2019 balance sheet is:  
  A) $20,000        B) $28,000        C) $18,000        D) $58,000

Answer 1