Answer:
The correct answer is letter "C": Estimated loss from an ongoing lawsuit.
Explanation:
A contingent liability is an amount that will need to be charged in the future but there are still outstanding problems that only make it a possibility. Litigation and the threat of litigation are the most common contingent liabilities, but this category also includes product warranties. If they are probable and the sum can be calculated, contingent liabilities must be reported on the company's Balance Sheet.
Answer:
The ending inventory value at cost is ($100,000)
Explanation:
To calculate the cost of ending inventory using the retail inventory method, we need to know:
- The cost-to-retail percentage = COGS/ sales during current year = (sales – net markup)/sales = ($2,500,000-$200,000)/$2,500,000 = 92%
- The cost of goods available for sale= Cost of beginning inventory + Cost of purchases = $200,000 + $2,000,000 = $2,200,000
- The cost of sales during the period = Sales × cost-to-retail percentage = $2,500,000 x 92% = $2,300,000
- The ending inventory = Cost of goods available for sale - Cost of sales during the period = $2,200,000 - $2,300,000 = ($100,000)
Answer: $450,000
Explanation:
It is shown that Nana Company does not have significant influence over Mama Company.
What this means is that Mama's retained earnings, incomes or dividends have no effect on the investment account of Nana in relation to their Mama investment.
The only relevant amount is the fair value of the Mama's stock that Nana owns.
= 10,000 * 45
= $450,000
Answer: $324,800
Explanation:
It is a general Principle that when calculating income tax expense, that the Extraordinary loss is treated separately because it is not a usual thing.
The income gained from changing the Accounting principle is not included as well.
The Taxable income to be recorded therefore is,
Taxable income = Income + Gain on disposal - Unusual loss (due to its infrequency)
Taxable income = 928,000 + 32,000 - 148,000
Taxable income = $812,000
Tax expense would therefore be,
= 812,000 * 40%
= $324,800
$324,800 is the amount of income tax expense Arreaga would report on its income statement.
Answer:
the rise in aggregate demand will cause lower unemployment.
Explanation:
the business confidence has risen this will increase investment and thus IS curve will shift out increasing the level of outputs in the economy, this will lead to rise in aggregate demand and thus output and price level in the equilibrium will increase.
so as output increases jobs will be created and unemployment will be reduce.
Therefore, the rise in aggregate demand will cause lower unemployment.
