[Answer] Palmer Frosted Flakes Company offers its customers a pottery cereal bowl if they send in 3 boxtops from Palmer Frosted Flakes boxes and $1.00. The company estimates that 60% of the boxtops will be redeemed. In 2010 the company sold 675 000 boxes of Frosted Flakes and customers redeemed 330 000 boxtops receiving 110 000 bowls. If the bowls cost Palmer Company $2.50 each how much liability for outstanding premiums should be recorded at the end of 2010?a. $25 000b. $37 500c. $62 500d. $87 500

Answer: b
Palmer Frosted Flakes Company offers its customers a pottery cereal bowl if they send in 3 boxtops from Palmer Frosted Flakes boxes and $1.00. The company estimates that 60% of the boxtops will be redeemed. In 2010 the company sold 675 000 boxes of F…

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