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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

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A punch!!!!!!!!!!!!!!!!!
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Lemur [1.5K]

Answer:

Gain $72,480

Explanation:

Calculation for the amount of gain or loss that Sheffield should recognize on the exchange

Using this formula

Gain/Loss= Book value – Fair value

Let plug in the formula

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Therefore the amount of gain or loss that Sheffield should recognize on the exchange will be $72,480

3 0
3 years ago
Acme-Jones Corporation uses a weighted-average perpetual inventory system. August 2, 24 units were purchased at $23 per unit. Au
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Answer:

Cost of goods sold= $816

Explanation:

Giving the following information:

Acme-Jones Corporation uses a weighted-average perpetual inventory system.

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On August 29: 34 units were sold.

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5 0
3 years ago
KFC has added many offerings to its menus in China to appeal to local tastes, including the "Dragon Twister," which is a chicken
andrew-mc [135]

Answer:

D. Product Invention

Explanation:

            KFC added many items in the menu list when they opened their restaurants at China. By doing this KFC  tries to incorporate the local cuisine of Chinese foods into their menu.

            In China, KFC invented a new dish and named it the "Dragon Twister". In this dish, it contains a chicken wrap with Peking duck sauce on it. It highly resembles the local food of China.

           Thus KFC tries to promote and do marketing of its product in China by inventing new dishes which is similar to the local Chinese food and adding it to the menu list of KFC.

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Thus, the answer is D. Product Invention.

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Answer:

True

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Lowering of interest rates by the Fed would have an effect on loans availed by the public. The quantity of loanable funds shall increase which would lead to lowering of interest rates charged by the banks.

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