# Quiz 2 - 1(TCO D A company offers a cash rebate of \$1 on...

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1. (TCO D) A company offers a cash rebate of \$1 on each \$4 package of light bulbs sold during 2010. Historically, 10% of customers mail in the rebate form. During 2010, 4,000,000 packages of light bulbs are sold, and 140,000 \$1 rebates are mailed to customers. What is the rebate expense and liability, respectively, shown on the 2010 financial statements dated December 31? (Points: 4) \$400,000; \$400,000 \$400,000; \$260,000 \$260,000; \$260,000 \$140,000; \$260,000 2. (TCO D) 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, 2011 is (Points: 4) \$11,250. \$21,250. \$22,500. \$42,500. 3. (TCO D) On January 1, 2010, Beyer Co. leased a building to Heins Corp. for a ten-year term at an annual rental of \$80,000. At inception of the lease, Beyer received \$320,000 covering the first two years' rent of \$160,000 and a security deposit of \$160,000. This deposit will not be returned

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