A Cereal Company Includes One Premium Coupon in Every Cereal

question 99

Multiple Choice

A cereal company includes one premium coupon in every cereal box.Upon returning ten such coupons to the company,a customer will be sent a free cereal bowl.In a recent year,the company sold 200,000 boxes of cereal for $1 a box.It is estimated that 20% of the coupons will be returned.If the cereal bowls cost the company $3 each,what amount of liability for premium redemptions must be recorded by the company?

• A)$6,000
• B)$12,000
• C)$24,000
• D)$200,000

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Definitions:

Agency Law

The area of law concerning agreements where one party (the agent) acts on behalf of another (the principal).

Sports Agents

Individuals who manage the careers of athletes, negotiating contracts and endorsement deals on their behalf.

Uniform Act

A standardized set of laws designed to be adopted by various jurisdictions to ensure consistency and harmony across state lines.

Fiduciary Capacity

A legal or ethical relationship of trust where one party, the fiduciary, acts in the best interest of another, typically in financial matters.