A Company Offers a Cash Rebate of $1 on Each

Multiple Choice

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