It will be 4 I think check your work I don’t know
Answer:
Huprey Co.
Identifying the accounting treatment for each claim as either (a) a liability that is recorded or (b) an item described in notes to its financial statements:
1. Huprey (defendant) estimates that a pending lawsuit could result in damages of $1,550,000; it is unlikely that the plaintiff will win the case.a. A liability that is recorded.
b. An item described in notes to its financial statements.
2. Huprey faces a loss on a pending lawsuit that it is unlikely to lose; the amount is reasonably estimable.
a. An item described in notes to its financial statements. b. A liability that is recorded.
3. Huprey faces a probable loss on a pending lawsuit; the amount is reasonably estimable.a. An item described in notes to its financial statements.
b. A liability that is recorded.
Explanation:
Huprey Co. will recognize and record contingent liabilities in its accounts when it can be reasonably established that the future event will occur and the amount of the liability can be reasonably estimated. The implication is that Huprey Co. must establish two things before a contingent liability is recognized and recorded. One is that the probability or the likelihood or the chance that the event will happen exists and can be estimated. With the probability estimate, it becomes possible for Huprey Co. to also estimate the amount that the happening of the event will cost it.
Answer:
31.12
Explanation:
Given that,
Growing at a constant rate = 6.5%
Firm’s last dividend, R = 3.36
Required rate of return = 18%
Expected dividend next year = 3.36 × (1 + 6.5%)
= 3.5784
Market value of stock:
= Expected dividend next year ÷ ( required return - growth rate)
= 3.5784 ÷ (0.18-0.065)
= 31.11652
= 31.12
Answer:
b. $20,000
Explanation:
Goodwill = Investment in Subsidiary - (Asset With book value - Liability with book value) - (Fair value of Asset - Book value of Asset)
Goodwill = $95,000 - ($86,400 - $15,000) - ($90,000 - $86,400)
Goodwill = $95,000 - $71,400 - $3,600
Goodwill = $20,000
So, parent should record goodwill on this purchase of $20,000
