Answer:
$32,000
Explanation:
Expected boxtops to redeemed = 800,000 × 60% = 480,000
Already redeemed boxtops = 352,000
Outstanding boxtops to be redeemed = 480,000 – 352,000 = 128,000
Outstanding bows to offer = 128,000/4 = 32,000
Cost of outstanding bows to offer = 32,000 × $2 = $64,000
Outstanding liability = Cost of outstanding bows to offer – Amount sent with boxtops
Outstanding liability = $64,000 – ($1 × 32,000) = $32,000
Therefore, the liability for outstanding premiums should be recorded at the end of 2021 is $32,000.
