<span>In california there are 4 forms of financial responsibility.</span>
Answer:
Morgan Manufacturing, Inc.
The Land should be recorded at $1,1505,597 , calculated as follows:
Down-payment - $340,000
Note payable - $628,597 (the Present value of $740,000 in 2 years at 6% interest)
Title search, etc - $34,000
Demolishing Building - $84,000
Clearing & Grading - $64,000
Explanation:
Land is a fixed asset or capital asset. It is a resource that is expected to generate future earnings.
All costs incidental to the land acquisition must be capitalized. The fair value of the note payable on the land is determined by calculating the present value (PV) at 6% for 2 years, in order to reflect the time value of money despite the fact that interest was not payable.
Answer:
Disclose the contingency and state that an estimate cannot be made.
Explanation:
Taylor Company's attorney informs its client that it is possible, but not probable, that the company will lose a currently litigated lawsuit. No reliable estimate of the potential loss is currently available. Taylor should accrue and/or disclose this potential loss BY DISCLOSING THE CONTINGENCY AND STATE THAT AN ESTIMATE CANNOT BE MADE.