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klio [65]
3 years ago
14

A foreign subsidiary of a U.S.-based company has been notified of a loss contingency with an estimated cost ranging between $220

,000 and $250,000 which is probable of resulting in an actual loss. Each dollar amount within this range of cost is equally likely of being the actual outcome. According to U.S. GAAP, what is the amount recognized as a provision for loss contingency?
Business
1 answer:
Marizza181 [45]3 years ago
3 0

Answer:

The amount recognized as a provision for loss contingency is $220,000

Explanation:

According to the United States  Generally Accepted Accounting Principles (US GAAP), the provision for loss contingency should be recognized based on the estimated amount. If the range is given then we should report the lower amount or minimum amount

In the given question, two amounts are given i.e $220,000 and $250,000

So $220,000 should be reported

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Osion Electronics Inc. incurs a cost of $350 to produce one unit of a cell phone. The company's management has priced the produc
Vsevolod [243]

Answer:

The economic value establish in this case is $450

Explanation:

Economic value is the term which is defined as the computation of the profits an asset has either manufactured or might produce in the future. It is that measure of the product or service benefit provide the economic agent.

For computing the economic value as:

EV (Economic value) = (Actual rate of return - Cost of Capital) × Net Investment

where

Actual rate of return is $800

Cost of capital is $350

Net Investment is nil

Putting the values above:

EV = $800 - $350

EV = $450

7 0
3 years ago
Classify each item as an asset, liability, common stock, revenue, or expense. (a) Issuance of ownership shares. select the corre
Roman55 [17]

Answer:

The classified list of items is as follows:

(a) Issuance of ownership shares - Common stock

(b) Land purchased - Asset

(c) Amounts owed to suppliers - Liability

(d) Bonds payable - Liability

(e) Amount earned from selling a product - Revenue

(f) Cost of advertising - Expense

Hence, all the items are classified as asset, liability, revenue, common stock and expense.

8 0
3 years ago
What is the most important duty of a firm's financial officer? to ensure that the firm has enough cash on hand to meet its commi
4vir4ik [10]
<span>What is the most important duty of a firm's financial officer? to ensure that the firm has enough cash on hand to meet its commitments at any given time to decide how to pay for investments to manage working capital to make investment decisions?</span>
8 0
3 years ago
Coachlight Inc. has a periodic inventory system. The company purchased 205 units of inventory at $9.50 per unit and 310 units at
lukranit [14]

Answer:

Weighted average cost per unit = $10.10

Explanation:

We know,

Under weighted average unit cost, the cost for purchased inventory = Total inventory costs ÷ total inventory in units

Given,

Total inventory in units = 205 + 310 = 515 units

Total inventory costs = (205 units × $9.50) + (310 units × $10.50)

= $1,947.50 + $3,255 = $5,202.50

Therefore,

Weighted average cost per unit = $5,202.50 ÷ 515 units

Weighted average cost per unit = $10.10

Therefore, the company will use this cost per unit to determine cost of goods sold and ending inventory.

5 0
2 years ago
Concord Corporation owned 16000 shares of Ivanhoe Corporation. These shares were purchased in 2017 for $130000. On November 15,
mafiozo [28]

Answer:

  • Gain = $271,310
  • Net reduction in retained earnings = $‭105,690‬

Explanation:

Gain = (Ivanhoe market price - Purchase price) * Number of shares issued as property dividend

Purchase price = 130,000 / 16,000

= $8.13

Number of shares issued as property dividend = 130,000 shares of Concord / 10

= 13,000 Ivanhoe shares

Gain = (29 - 8.13) * 13,000

= $‭271,310‬

Net reduction in retained earnings:

= Dividends payable - Gain

= (13,000 * 29) - ‭271,310‬

= $‭105,690‬

4 0
2 years ago
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