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Nadusha1986 [10]
3 years ago
7

Unified Airlines is being sued by Northeast Airlines for $5,000,000. At the end of the year, Unified feels it is probable that i

t will pay $5,000,000 at some point in the following year. What should Unified and Northeast record at the end of the year concerning the lawsuit?
Business
1 answer:
alexgriva [62]3 years ago
4 0

Answer:

Unified records $5,000,000 contingent loss; Northeast does not record any contingent gain

Explanation:

CONTIGENT LOSS can be defined as a liability or loss which is often dependent upon unforeseen circumstances which may occur in the future and may not occur and may be incurred by the entity based on the result of the future event. which is why it is often recorded only in a situation where it can be estimated if not, then it should not be disclosed.

CONTINGENT GAIN can be defined as an asset which are yet to occurred in which when it occured it will lead to increase in asset which is why it is not often recognized in the financial statements of a business, company or organisation until the transaction has been settled fully.

Therefore CONTINGENT ASSET leads to potential gain.

Concerning the law suit:

UNIFIED records $5,000,000 contingent loss; NORTHEAST does not record any contingent gain.

You might be interested in
In general Accounts are split into Personal Accounts and ImpersonalAccounts<br> True<br> False
ruslelena [56]

Answer:

True.

Explanation:

Financial accounting is an accounting technique used for analyzing, summarizing and reporting of financial transactions like sales costs, purchase costs, payables and receivables of an organization using standard financial guidelines such as Generally Accepted Accounting Principles (GAAP) and financial accounting standards board (FASB).

Thus, it is a field of accounting involving specific processes such as recording, summarizing, analysis and reporting of financial transactions with respect to business operations over a specific period of time. Financial experts or accountant uses either the cash basis or accrual basis of accounting.

An account can be defined as a formal and individual record of the financial transactions of a person, business firm, goods, assets, liability, etc.

All the transactions with respect to a particular item such as income, expenses, assets, liability, etc., are recorded in its account.

In general, accounts are split or divided into two main categories and these includes;

I. Personal Accounts

II. Impersonal Accounts.

6 0
2 years ago
Question #5
andrey2020 [161]
Shsiieiwiwoowlqllalaksmsndnd
3 0
2 years ago
Sawyer Industries began business at the start of the current year. The company planned to produce 25,000 units, and actual produ
valentina_108 [34]

Answer:

$208,000

Explanation:

The computation of the absorption-costing income is shown below:

As we know that

Net income = Gross profit - variable expense - fixed expense

where,

Gross profit is

= Sales - cost of goods sold

= (22000 units at $30) - (22,000 units at $14)

= $660,000 - $308,000

=  $352,000

The $14 come from

= 8 + 150,000 ÷ 25,000

= 8 + 6

= 14

Now the variable expense is

= 22000 at $2

= $44,000

And, the fixed expense is $100,000

So, the net income is

= $352,000 - $44,000 - $100,000

= $208,000

6 0
2 years ago
What is the purpose of the sherman antitrust act
tamaranim1 [39]
To destory monopolies that were using their power to harm society.
7 0
3 years ago
Read 2 more answers
PAW Industries has 5 million shares of common stock outstanding with a market price of $8.00 per share. The company also has out
AlladinOne [14]

Answer:

A. 10.14%

Explanation:

1.Market value of PAW common stock:5,000,000*8=$40,000,000

2.Market value of PAW outstanding preferred stock=$10,000,000

3.Market value of PAW bonds outstanding=96,000,000(100,000*1000*96%)

Total Market value(1+2+3)=146,000,000

4.Cost of equity amount on common stock(19%*40,000,000)=7,600,000

5.Cost of preferred stock amount (15%*10,000,000)=$1,500,000

6.After tax cost of Debt amount(9%*66%*96,000,000)=$5,702,400

Total cost amount(4+5+6)=14,802,400

The WACC can be calcualted as: Total cost amount/Total market value

                                                        14,802,400/146,000,000=10.14%

The answer should be A. 10.14%

3 0
3 years ago
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