Determine the rebate expense and liability


A company offers a cash rebate of $1 on each $4 package of batteries sold during 2007. Historically, 10% of customers mail in the rebate form. During 2007, 6,000,000 packages of batteries are sold, and 210,000 $1 rebates are mailed to customers. What is the rebate expense and liability, respectively, shown on the 2007 financial statements dated December 31?

a. $600,000; $600,000

b. $600,000; $390,000

c. $390,000; $390,000

d. $210,000; $390,000

Request for Solution File

Ask an Expert for Answer!!
Accounting Basics: Determine the rebate expense and liability
Reference No:- TGS090422

Expected delivery within 24 Hours