In an effort to increase sales,Moore Company began a sales promotion campaign on June 30,2014.Part of this promotion included placing a special coupon in each package of candy bars sold.Customers were able to redeem ten coupons for a baseball.Each premium costs Moore $1.50.Moore estimated that 70 percent of the coupons issued will be redeemed.For the six months ended December 31,2014,the following information is available:
What is the estimated liability for premium claims outstanding at December 31,2014?
Definitions:
Endorse
To formally support, approve, or sign a document, often to authenticate its validity or to transfer rights or ownership.
Debt
A financial obligation owed by one party (the debtor) to another (the creditor), typically involving borrowed money that is expected to be paid back with interest.
Holder In Due Course
A legal term referring to a person who has acquired a negotiable instrument in good faith and for value, and thus has certain protections against defenses and claims that could be asserted against the original party.
Demand Payment
A formal request for the payment of owed money.
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