In December 2011, Chocomill Co. began including one coupon in each package of candy that it sells and offering a toy in exchange for 50 centavos and 5 coupons. The toys cost Chocomill 70 centavos each. Eventually 70% of the coupons will be redeemed. During December, Chocomill sold 110,000 packages of candy and no coupons were redeemed. In its December 31, 2011, balance sheet, what amount should Chocomill report as estimated liability for coupons?

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Lets break down the calculation stepbystep 1 Calculate the number of coupons distributed in December ... View the full answer