1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
polet [3.4K]
3 years ago
15

Top Sound International designs and sells high-end stereo equipment for auto and home use. Engineers notified management in Dece

mber 2021 of a circuit flaw in an amplifier that poses a potential fire hazard. Further investigation indicates that a product recall is probable, estimated to cost the company $2.8 million. The fiscal year ends on December 31. Required: Should this contingent liability be reported, disclosed in a note only, or neither?
Business
1 answer:
Strike441 [17]3 years ago
6 0

Answer:Yes it should be reported.

$2.8 million should be reported in the the balance sheet as a liability.

Explanation: Contingent liabilities are liabilities that depend on the outcome of an event that may likely not occur.

Before they can be reported in financial statement, it must be able to estimate the value of such contingent liability and the liability must have a higher than 50% possiblity of being achieved.

If the value can be estimated, then the liability has a higher chance of being realised.

Qualifying contingent liabilities such as the $2.8 million estimated by Top Sound International should be recorded in the income statement as an expense and a liability on the balance sheet.

Therefore the $2.8 million liability should be reported in its 2018 balance sheet

You might be interested in
In an electric motor, a commutator
Basile [38]

Answer:

ook

Explanation:

ook

4 0
2 years ago
What two task does a public affairs officer do?
skad [1K]
1.Planning publicly strategies and campaigns. 2.Writing and producing presentations and press releases.
4 0
3 years ago
Names for clear lip gloss
drek231 [11]

Answer:

crystal clear lip gloss

Explanation:

crystals are clear

3 0
3 years ago
a manufacturer of games sell each copy for 21.95.the manufacturing cost of each copy is 14.92. monthly fixed cost is 8500. durin
natali 33 [55]

The break-even point is calculated as -

Break-even point (in units) = Fixed cost ÷ Contribution margin per unit

Here,

Selling price = $ 21.95

Variable cost (manufacturing costs) = $ 14.92 (since, costs bifurcation is not given, the manufacturing costs are taken as variable costs)

Contribution per unit = Selling price - Variable cost (manufacturing costs)

Contribution per unit = $ 7.03

Fixed cost (monthly) = $ 8500

Now,

Break-even point (in units) = $ 8,500 ÷ $ 7.03

Break-even point (in units) = 1,209.1 or 1210 games

7 0
3 years ago
Working from home only works in a few kinds of businesses<br> true<br> false
sladkih [1.3K]
The answer is true .
4 0
3 years ago
Read 2 more answers
Other questions:
  • The manager of a carpet store is trying to determine the best installation crew size. he has tried various crew sizes with the r
    13·1 answer
  • How to enroll in college after dropping out?
    13·2 answers
  • Hawaiian Specialty Foods purchased equipment for $30,000. Residual value at the end of an estimated four-year service life is ex
    5·1 answer
  • Suppose that an economy has the per-worker production function given as:
    11·1 answer
  • Suppose the corporate tax rate is 35%. Consider a firm that earns $10,000 before interest and taxes each year with no risk. The
    15·1 answer
  • Assume that we are looking at the local market for pizza. Assume that the equilibrium price is $20 and the equilibrium quantity
    11·1 answer
  • Which fixed expense would be most difficult to change if money is needed for car payments? rent utilities groceries internet
    16·1 answer
  • Atlantic Corporation reported the following amounts at the end of the first year of operations Common stock $ 200,000 Sales reve
    12·1 answer
  • What happens if people believe that government spending on library books will encourage even more reading and increase the priva
    6·1 answer
  • Describe 'the market place' ​
    14·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!