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ackpine Trading Stamp Co. records trading stamp revenue and provides for the cost of redemptions...

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Accounting

ackpine Trading Stamp Co. records trading stamp revenue and provides for the cost of redemptions in the year stamps are sold. Jackpine's past experience indicates that only 75% of the stamps sold will be redeemed. Jackpine's liability for stamp redemptions was $3,000,000 at December 31,2022. Additional information for 2023 is as follows:
Stamp revenue from stamps sold to licensees $2,000,000
Cost of redemptions for stamps sold prior to 20231,350,000
If all the stamps sold in 2023 were presented for redemption in 2023, the redemption cost would be $1,000,000. What amount should Jackpine report as a liability for stamp redemptions at December 31,2023?
Question 3 options:
A)
$3,750,000
B)
$2,650,000
C)
$2,400,000
D)
$1,650,000

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