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Alla [95]
3 years ago
10

Buchanan Company recently was sued by a competitor for patent infringement. Attorneys have determined that it is probable that B

uchanan will lose the case and that a reasonable estimate of damages to be paid by Buchanan is $305,090. In light of this case, Buchanan is considering establishing a $112,720 self-insurance allowance.
What entry, if any, should Buchanan record to recognize this loss contingency? (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)


Account Titles and Explanation


Debit


Credit
Business
1 answer:
Lisa [10]3 years ago
8 0

Answer:

Dr Lawsuit Expense 305,090

Cr Lawsuit Liability 305,090

Dr Lawsuit Loss 112,720

Cr Lawsuit Liability 112,720

Explanation:

Preparation of Journal entries

Based on the information given we were told that Buchanan had to paid the amount of $305,090 for damages which means that the Journal entry will be:

Dr Lawsuit Expense 305,090

Cr Lawsuit Liability 305,090

Based on the information given we were told that he was considering to establish the amount of $112,720 as a self insurance allowance which means that the Journal entry will be:

Dr Lawsuit Loss 112,720

Cr Lawsuit Liability 112,720

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A firm agreed to pay its workers ​$2525 an hour in 2016 and ​$4141 an hour in 2017. The price level for these years was 241 in 2
NemiM [27]

Answer:

(a) 10.4%; 16.73%

(b) 6.33%

Explanation:

Given that,

Wages paid to the workers in 2016 = $25 per hour

Price level in 2016 = 241

Wages paid to the workers in 2017 = $41 per hour

Price level in 2017 = 245

Real wage rate in 2016:

= (Nominal wages ÷ Price level) × 100

= ($25 ÷ 241) × 100

= 0.104 × 100

= 10.4%

Real wage rate in 2017:

= (Nominal wages ÷ Price level) × 100

= ($41 ÷ 245) × 100

= 0.1673 × 100

= 16.73%

Therefore, the real wage increase received by these workers in​ 2017 is calculated as follows:

= Real wage rate in 2017 - Real wage rate in 2016

= 16.73% -  10.4%

= 6.33%

Hence, these workers do get a raise between the two years.

8 0
3 years ago
Bengal Co. provides the following sales forecast for the next three months: July August SeptemberSales units 4,200 4,900 4,760Th
nexus9112 [7]

Answer:

Hie, on the choice of answers provided by your question there is no correct answer.

The correct answer for budgeted production units for July are 4,375 units

Please see below explanation and calculation i have prepared for the answer.

Prepare a Production Schedule for July as follows :

                                                                                     <u>July</u>

Budgeted Sales                                                          4,200

Add Budgeted Closing Inventory (4,900 × 25%)      1,225

Total Production Needed                                          5,425

Less Budgeted Opening Inventory                          (1,050)

Budgeted Production                                                4,375

8 0
3 years ago
Harry wants to save money in a bank account. He decides to open a _______ account with a five-year maturity date because it offe
MrMuchimi
Money Market,  a higher interest rate
4 0
3 years ago
Read 2 more answers
You have written a call option on Walmart common stock. The option has an exercise price of $89, and Walmart’s stock currently t
Alexandra [31]

Answer:

A. Intrinsic value is 0. Time value is 1.35.

B. 1.35

C. -4.65

Explanation:

7 0
3 years ago
A university issues a bond with a face value of $5000 and a coupon rate of 4. 41% that matures on july 15, 2018. The holder of s
Margaret [11]

The coupon payments would be made twice every year.

What is coupon payment?

Coupon payment means the cash amount that bondholders would receive from the university(bond issuer) on periodic basis till the bond matures, it is likely that the coupons are payable semiannually or annually as would be determined in this analysis.

The coupon payment is closely related with the coupon rate , which means that in order to determine the number of times in a year that coupons will be paid we can make use of the coupon received, the par value, the coupon rate, such that the frequency of coupon payments would be the unknown as shown below:

coupon receipt=par value*coupon rate/coupon frequency

coupon receipt=$110.25

par value=$5000

coupon rate=4.41%

coupon frequency=unknown(assume it is X)

$110.25=$5,000*4.41%/X

$110.25=$220.50/X

X=$220.50/$110.25

X=2

Coupons would be twice every year, which means semiannual coupon payments

Read more on coupon frequency on:brainly.com/question/16748047

#SPJ1

7 0
2 years ago
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