Answer: According to Ian Redpath and Greg Urban, the threshold amount required for conclusively stating whether a substantial basis adjustment is mandatory is $250,000. The amount required is $250,000 in order for one to know whether they are in need for a substantial basis reduction or maybe not. It's required when the amount indeed exceeds $250,000.
What John’s company should prepare to demonstrate is the
best practices that they are engaging in managing how it impacts the
environment as this is a way of complying or keep up with the top management request
and when they undergo with the review.
Answer:
Please find the detailed explanation below.
Situation 1 and 2 have disclosure while situation 3 does not require any disclosure.
Explanation:
Situation 1. Accrual. The one-year warranty has created what is known as contingent liability. Contingent liability is a type of liability that is dependent on the outcome of some specific actions which has happened in the past. The eventual liability may or may not happen. But since the probable claim from the one-year warranty has been determined, it should be disclosed. But if the claim cannot be determined, it shouldn't be disclosed.
Situation 2. Since this contract happened before the issuance of financial statement and the amount of loss from this contract can be reasonably estimated or determined, then it must be disclosed and the likely amount must also be disclosed. This disclosure will be under 'note to the financial statement'.
Situation 3. This is a self insurance and self insurance is not an insurance. There is no contingent liability in this situation. Also, there is no accident, no injury. Hence, this is no disclosure here.
Answer:
$926,000
Explanation:
For computing the initial cost of the warehouse project, we consider the current value of the land i.e represent the opportunity cost and the land value which is purchased six years ago for $874,500 represent the sunk cost which is not recoverable now. So, this sunk cost is not relevant.
And, the lease cost is also not relevant as the lease period will be ended soon.
All other information which is given is not relevant. Hence, ignored it
Its c good luck and hope that helps
