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Pepsi [2]
3 years ago
12

Pacific Cruise Lines is a defendant in litigation involving a swimming accident on one of its three cruise ships.1. The likeliho

od of a payment occurring is probable, and the estimated amount is $1.14 million. 2. The likelihood of a payment occurring is probable, and the amount is estimated to be in the range of $0.94 to $1.14 million. 3. The likelihood of a payment occurring is reasonably possible, and the estimated amount is $1.14 million. 4. The likelihood of a payment occurring is remote, while the estimated potential amount is $1.14 million. Record the necessary entry for the scenarios given above.
Business
1 answer:
Setler [38]3 years ago
6 0

Answer:

1. The likelihood of a payment occurring is probable, and the estimated amount is $1.14 million.

  • Dr Law suit loss 1,140,000
  •     Cr Law suit liability 1,140,000

2. The likelihood of a payment occurring is probable, and the amount is estimated to be in the range of $0.94 to $1.14 million.

  • Dr Law suit loss 940,000
  •     Cr Law suit liability 940,000

US GAAP allows companies to record probable losses at lowest estimated value.

3. The likelihood of a payment occurring is reasonably possible, and the estimated amount is $1.14 million.

  • no journal entry is required, only a disclosure in the footnotes of the financial statements.

A contingent liability (or loss) that is only possible, but not probable, does not need to be journalized and recorded. It only needs to be disclosed in the footnotes of the financial statements.

4. The likelihood of a payment occurring is remote, while the estimated potential amount is $1.14 million.

  • no journal entry is required

A contingent liability (or loss) that is remote, does not need to be journalized or recorded, nor included in the footnotes of the financial statements.

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If hat size and iq are positively correlated, which of the following is true? people with large heads tend to have high iqs. peo
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Which is a business likely to need to secure startup capital from a venture capitalist?
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Read 2 more answers
Hogan Industries had the following inventory transactions occur during 2017: Units Cost/unit Feb. 1, 2017 Purchase 110 $46 Mar.
Rama09 [41]

Answer:

The answer is: Gross profit = $2,788

Explanation:

  • Feb. 1         Purchase    110 units     $46 per unit
  • March 14    Purchase    190 units    $48 per unit
  • May 1         Purchase     135 units   $ 50 per unit

312 units were sold at $64 per unit, tax rate is 30%

Using FIFO, what is the company's gross profit? We first calculate COGS

Cost of goods sold - 312 units:

  • 110 units at $46 per unit = $5,060
  • 190 units at $48 per unit = $9,120
  • 60 units at $50 per unit = $3,000

Total COGS = $17,180

<u>Income statement for Hogan Industries 2017</u>

Total revenue         $19,968

<u>COGS                     ($17,180)     </u>

Gross profit             $2,788

<u>Taxes 30%             ($836.40)   </u>  

Net profit                $1,951.60

6 0
2 years ago
Coastal Shores Inc. (CSI) was destroyed by Hurricane Fred on August 5, 2021. At January 1, CSI reported an inventory of $170,000
Fofino [41]

Answer:

$65,000

Explanation:

Calculation to determine what The estimated inventory loss due to Hurricane Fred would be

Beginning inventory$170,000

Add Net purchases195,000

Goods available for sale365,000

($170,000+$195,000)

Less: Cost of goods sold (300,000)

($480,000/160%)

Estimated ending inventory$65,000

($365,000-$300,000)

Therefore The estimated inventory loss due to Hurricane Fred would be $65,000

8 0
3 years ago
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