Answer:Yes it should be reported.
$2.8 million should be reported in the the balance sheet as a liability.
Explanation: Contingent liabilities are liabilities that depend on the outcome of an event that may likely not occur.
Before they can be reported in financial statement, it must be able to estimate the value of such contingent liability and the liability must have a higher than 50% possiblity of being achieved.
If the value can be estimated, then the liability has a higher chance of being realised.
Qualifying contingent liabilities such as the $2.8 million estimated by Top Sound International should be recorded in the income statement as an expense and a liability on the balance sheet.
Therefore the $2.8 million liability should be reported in its 2018 balance sheet
Answer:
The stock price will not be affected by the accounting change.
Explanation:
Since it is assumed that the capital markets are efficient, the stock's market price is expected to reflect all available and relevant information. This implies that all the necessary information is already incorporated into the stock price. The CEO cannot deceive the market through this change in accounting method. Therefore, the stock price will not be undervalued or overvalued. Moreover, the change in accounting method only shifts the timing for reporting income.
Answer:
organizational culture
Explanation:
Organizational culture stating that we need to coordinate and understand the problem of employees for the benefit of the organization value and resolve their queries and need to share company policy and procedure so that employees of the organization can work on it and work goes in a efficient manner.
The working culture (for the employees) should represent the values and norms of the organization.
So we need to take care of organizational culture.
The firm can price discriminate. There are two identifiable segments with different elasticities.
The business may use pricing discrimination. Two distinct segments with various elasticities are present. Resale is unlikely because the two nations are at war. To solve, calculate the marginal revenue for each and set it at $10 for the marginal cost.
MRB= 20 - (1/2)QB = 10 or QB= 20 and pB= 15.
MRA= 50 - QA = 10 or QA= 40 and pA= 30.
A selling tactic known as price discrimination involves charging clients various rates for the same good or service depending on what the vendor believes they can persuade the customer to accept. When a merchant uses pure price discrimination, they charge each consumer the highest price they will agree to.
To know more about price discrimination:
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Correct question:
A weapons producer sells guns to two countries that are at war with each other. The guns can be produced at a constant marginal cost of $10. The demand for guns from the two countries can be represented as:
QA= 100 - 2p
QB= 80 - 4p
Why is the weapons producer able to price discriminate?
What price will it charge to each country?
Answer:
b.$1,657,500
Explanation:
A. Activity rate
Department
Processing
Packaging
Testing
Expected Use of Driver
800
200,000
2000
Cost
1,500,000
15,000,000
600,000
Activity For Sludge (cost÷expected use of driver)
1,875.00
7.50
300.00
B. Allocated cost
Department
Processing
Packaging
Testing
Activity Rate ( Estimated Cost/ Total Activity)
1,875.00
7.50
300.00
Activity For Sludge
500.00
80,000.00
400.00
Allocated Cost ( Activity Rate× Activity for Sludge)
937,500.00
600,000.00
120,000
Total Allocated cost $ 1,657,500.00