Captain Cook Cereal includes one coupon in each package of Granola that it sells and offers
a puzzle in exchange for $2.00 and 3 coupons. The puzzles cost Captain Cook $3.50 each.
Experience indicates that 20% of the coupons eventually will be redeemed. During the last
month of 2009, the first month of the offer, Captain Cook sold 6 million boxes of Granola and
900,000 of the coupons were redeemed. What amount should Captain Cook report as a
liability for coupons on its December 31, 2009, balance sheet?
The way to answer this question is ... View the full answer