Question

d heva mentional 54.00 cash refund. P 00.000 coupons had been w Poseidon should report and 1.000.000 bets under a new sales dan ber te, which is the customer a ts that of the rates will be redeemed e d for redemption during the year. A December balance for redeemed rates of a) 52.800.000 b) $ 700,000 c) S 800,000 d) $1,000,000 11) In May of 2020, Hera Financial Services became involved in a penalty dispute with the EPA. At December 31, 2020, the environmental attorney for Hera indicated that an unfavorable outcome to the dispute was probable. The additional penalties were estimated to be $770,000 but could be as high as $1,170,000, with all amounts equally likely. After the year- end, but before the 2020 financial statements were issued, the parties came to a settlement for $900,000. Hera should have an accrued liability on its December 31, 2020, balance sheet of: a) $ 970,000 b) $ 770,000 c) $ 900,000 d) $ 1,170,000

Answer 1

Part 10

Option C

$800000

Liability = ((1000000*70%)-500000) * $4 = $800000

Part 11

Option C

$900000

Accrued liability = settlement price = $900000

Accrued liability is equals to settlement price (they both are same because settlement price is the amount which should be paid).