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zimovet [89]
3 years ago
11

In accounting for a contingent liability, if the likelihood of the obligation is probable but the amount cannot be estimated, a

company must:_____.a. recognize the liability and report it on the balance sheet.
b. do nothing.
c. not recognize or disclose the liability until it is certain and the exact amount is known.
d. provide disclosure in the footnotes to the financial statements.
Business
1 answer:
Tems11 [23]3 years ago
6 0

Answer: d. provide disclosure in the footnotes to the financial statements.

Explanation:

A contingent liability is an obligation that a company might owe in future depending on the outcome of an event such as a law suit.

To record a contingent liability in the books, two conditions must be satisfied;

  1. Loss must be probable
  2. Amount must be estimable

If these two conditions are not satisfied then the contingent liability may simply be disclosed as a footnote in the financial statement. The amount here is not estimable so can be disclosed as a footnote.

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8 0
3 years ago
On March 1, 2012, Kelly Company lent $3,500 to Tim on a 1-year 6% promissory note. The amount of interest to be accrued on Decem
schepotkina [342]

Answer:

$210

Explanation:

Calculation for what the amount of interest to be accrued on December 31 will be

Using this formula

Accrued interest =Amount lent×Promissory note percentage

Let plug in the formula

Accrued interest=$3,500×6%

Accrued interest=$210

Therefore the amount of interest to be accrued on December 31 will be $210

7 0
3 years ago
The balance sheet of Hidden Valley Farms reports total assets of $450,000 and $550,000 at the beginning and end of the year, res
hoa [83]

Answer:

Hidden Valley's Asset Turnover = 1.6

Explanation:

Average Total Asset = (Total Assets at the beginning of the year + Total Assets at the end of the year)/2

Average Total Asset = (450,000+550,000)/2

Average Total Asset = 1,000,0000/2 = 500,000

Asset Turnover = Net Sales / Average Total Asset

Asset Turnover = 800,000/500,000

Asset Turnover = 8/5

Asset Turnover = 1.6

7 0
3 years ago
Read 2 more answers
Batman parked the Batmobile himself and kept the bat keys. There was no attendant at the lot. Two hours later, Batman left the r
kupik [55]

Answer:

First of all, there was no attendant in the parking lot when batman arrived, meaning that he did not hand the keys. Batman kept the leys to himself all the time, so there is no transfer of possession. Without a valid transfer of possession, bailment cannot exist.  Whether Batman ate at the restaurant or spent time talking to Wonder Woman do not change the facts that the safety of his Batmobile was his responsibility only.

5 0
3 years ago
The Sand Cruiser is a takeout food store at a popular beachside resort. Teresa Texton, owner of the Sand Cruiser, was deciding h
Vanyuwa [196]

Answer: $6.2

Explanation: Contribution margin is the amount of revenue left after paying for the variable cost, it can be formulated as follows :-

contribution =  sales - variable cost

In case of Limeade:-

sale price = $22.10

Variable cost = $15.90

so, putting the values into equation we get :-

contribution per foot = $22.10 - $15.9 = $6.2

5 0
3 years ago
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