Exhibit 9-3 John Company includes three coupons in each package of cookies it sells. In exchange for 20 coupons, a customer will receive a cookie sheet. John estimates that 30% of the coupons will be redeemed. In 2016, John sold 4,000,000 boxes of cookies and purchased 150,000 Cookie sheets at $2.50 each. During the year, 970,000 coupons were redeemed. ? Refer to Exhibit 9-3. What amount should

John report as estimated premium claims outstanding at December 31, 2016?
A) $121,250
B) $328,750
C) $450,000
D) $500,000


B

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What will be an ideal response?

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