Guarantees also may trigger financial statement recognition of a liability. Which of the following guarantees would not require
financial statement recognition on the books of the guarantor? a. Guarantee to repay the debt of another firm that is solvent and profitable (the interest rate of the debt was not reduced due to the guarantee) b. Guarantee to repurchase accounts receivable sold in a prior transaction if the receivables become uncollectible c. Guarantee to repay the debt of another firm that is insolvent d. Guarantee to repay the debt of another firm that is currently solvent but has no history of profitability (the interest rate of the debt was reduced due to the guarantee)
a. Guarantee to repay the debt of another firm that is solvent and profitable (the interest rate of the debt was not reduced due to the guarantee).
Explanation:
According to the rules of full disclosure, the company is to disclose facts about all transactions or contracts that impact and business. For example of a business is most likely to go out of business because of an unfavourable court ruling, this information must be disclosed in the companie's financial statement. If however the activity will not impact the business there is no need to disclose.
In this instance the guarantee need not be disclosed since the guarantee is to repay debt of a company that is solvent and profitable. The chances that the guarantee will become enforceable is very slim.
Also the interest rate of the debt was not reduced due to the guarantee. So there is no financial impact on the business.
IMPORTANT NOTE: The data of the calculation was obtained from an online research.
The answer and procedures of the exercise are attached in a microsoft excel document.
Explanation
Please consider the data provided by the exercise. If you have any question please write me back. All the exercises are solved in a single sheet with the formulas indications.
The discouraged workers are those workers who can do work but at current they are not employed and are not looking for the work or they are unemployed since long
In the given case, there are approximate 5,000 discouraged workers who are looking for job but the population would remain unchanged and the number of people in the labor force would be risen or high
A command economy is no freedom to the people. The mixed economy has public input and government input A free-market system is to the public where they can freely change prices and products. It is free from government intrusion
Based on the information provided within the question it can be said that the industry that managed to accomplish this was the mining industry. This industry was the main push on bringing the west into the global economy, as the west mined precious metals such as gold which since there is only a fixed amount it is considered a very valuable commodity which would give those who had it a large capital. Also in order to mine the gold and other precious metals the companies needed a large number or laborers.
