Essay
Ingram, Inc., places a coupon in each box of its product.Customers may send in ten coupons and $3, and the company will send them a CD.Sufficient CDs were purchased at $5 apiece.A certain number of boxes of product were sold in 2010.It was estimated that a total of 5% of the coupons will be redeemed.In 2010, 18, 000 coupons were redeemed.Mailing costs were $0.40 per CD.At December 31, 2010, the following adjusting entry was made to record the estimated liability for premium outstanding:
Required:
Compute the number of boxes of product sold by Ingram in 2010.
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