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4 years ago

Analyzing Contingent and Other Liabilities:

Business

1 answer:

miskamm [114]4 years ago

6 0

Answer:

1. Situation is that a Stockholder has filed a lawsuit against C corporation.

Accounting treatment: Neither record nor disclose any liability.

Since the liability is not at all possible, it should be neither recorded nor disclosed.

2. Situation: F signed a 60 days, 10% note when it purchased items from another company.

Account treatment: Record the liability on the balance sheet.

Real liability that is both certain and the liability amount can also be reasonably estimated. It should be recorded on the balance sheet.

3. The EPA notifies S co that a state where it has a plant is filing a lawsuit.

Account treatment: Disclose the liability in a financial statement footnote.

The liability is probable but not certain and liability amount can also be reasonably estimated. It should be disclosed in financial statement footnote.

4. Situation: Company manufactured and sold products to a retailer that later sold product to consumer.

Account treatment: Record the liability on the balance sheet.

Real liability that is both certain and the liability amount can also be reasonably estimated. It should be recorded on the balance sheet.

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On July 1, Year 1, Danzer Industries Inc. issued $40,000,000 of 10-year, 7% bonds at a market (effective) interest rate of 8%, r

sammy [17]

Answer:

1. Journalize the entry to record the amount of cash proceeds from the issuance of the bonds on July 1, Year 1.

Dr Cash 37,282,062

Dr Discount on bonds payable 2,717,938

Cr Bonds payable 40,000,000

2. Journalize the entries to record the following:

a. The first semiannual interest payment on December 31, Year 1, and the amortization of the bond discount, using the straight-line method. Round to the nearest dollar.

discount on bonds payable = 2,717,938 / 20 coupons = $135,896.90

December 31, Year 1, first coupon payment

Dr Interest expense 1,535,896.90

Cr Cash 1,400,000

Cr Discount on bonds payable 135,896.90

b. The interest payment on June 30, Year 2, and the amortization of the bond discount,using the straight-line method. Round to the nearest dollar.

June 30, Year 2, second coupon payment

Dr Interest expense 1,535,896.90

Cr Cash 1,400,000

Cr Discount on bonds payable 135,896.90

3. Determine the total interest expense for Year 1.

$1,535,896.90

4. Will the bond proceeds always be less than the face amount of the bonds when the contract rate is less than the market rate of interest?

yes, if the market rate is higher than the coupon rate, the bonds will sell at a discount.

5. (Appendix 1) Compute the price of $37,282,062 received for the bonds by using the present value tables in Appendix A at the end of the text. Round to the nearest dollar.

bond price = PV of face value + PV of coupon payments

PV of face value = $40,000,000 x 0.4564 (PV factor, 4%, 20 periods) = $18,256,000
PV of coupon payments = $1,400,000 x 13.590 (PV annuity factor, 4%, 20 periods) = $19,026,000

bond's market price = $18,256,000 + $19,026,000 = $37,282,000

6 0

3 years ago

When a German company decides to build a new hotel in Manhattan and the design calls for the 13th floor to be renamed the 14th f

Andrews [41]

Answer:

It is acknowledging a cultural symbolism about the number 13

Explanation:

A cultural symbol is an object, a behavior or a word that has a particular meaning in a culture. In Germany the number 13 is considered an unlucky number and they prefer not to use it and this is a cultural symbol. So, according to this, the answer is that the firm is acknowledging a cultural symbolism about the number 13.

4 0

4 years ago

In the case of an external cost, marginal private cost?

skad [1K]

Private costs and external costs are separated by economists. Private expenses are those incurred by the company manufacturing the item. Someone not connected to the transaction is responsible for external expenses. The contrast between private and external advantages is the same.

<h3>What do you mean by private costs?</h3>

Any expense that an individual or business incurs to purchase or create products and services is referred to as a private cost.

This covers the price of labor, supplies, equipment, and everything else that an individual or business pays for.

Any adverse impacts or injury brought on as a result of the production are not included in the private cost.

Driving a car has several personal expenditures, including gasoline and oil, maintenance, depreciation, and even the amount of time the driver spends behind the wheel.

Private expenses must be considered when making decisions about production and consumption since they are paid for by the company or the customer.

To learn more about private cost, refer to the following link:

brainly.com/question/24188698

#SPJ4

6 0

2 years ago

Sole Purpose Shoe Company is owned and operated by Sarah Charles. The company manufactures casual shoes, with manufacturing faci

IgorLugansk [536]

Answer:

1. The reason Sarah might want to use standard costs to compare with her actual costs is:

a. Management can evaluate the differences between standard costs and actual costs to focus on correcting the cost variances.

2. Drawbacks of using Standard Costs are:

c. Standards limit operating improvements because employees may be discouraged from improving beyond the standards.

d. Employees may focus only on efficiency improvement and their own operations rather than considering the larger objectives of the organization.

e. Standards may become "stale" in a dynamic manufacturing environment.

Explanation:

Standard costs encourage the pursuit of management goals. They are the costs that should be under a particular type of circumstances. They are usually compared with actual costs to determine their differences or variances. Their use helps management to focus on how to improve overall performance.

5 0

3 years ago

7. What is supply and demand? Give me an example of a supply and demand currently?

Marysya12 [62]

Answer:

Supplier sells the goods at various prices, depending on how much consumers want it, and at the rate that the goods are being sold.

For example, now, during the pandemic, face masks are now in very very high demand. Due to this, suppliers has now increased the price of the face masks, as to take advantage of the current situation

4 0

3 years ago