Homework Answers
a. Describe the situation in a note to the financial statements.
b. Do not disclose.
c. Record an expense and a liability based on estimated amounts.
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Freeman Motors, a motorcycle manufacturer, had the following contingencies. Determine the appropriate accounting treatment for each...
S11-12 Accounting treatment for contingencies Freeman Motors, a motorcycle manufacturer, had the following contingencies. a. Freeman...
S11-12 Accounting treatment for contingencies Freeman Motors, a motorcycle manufacturer, had the following contingencies. a. Freeman estimates that it is reasonably possible but not likely that it will lose a current lawsuit. Freeman's attorneys estimate the potential loss will be $4,500,000. b. Freeman received notice that it was being sued. Freeman considers this lawsuit to be frivolous. I c. Freeman is currently the defendant in a lawsuit. Freeman believes it is likely that it will lose the lawsuit and estimates...
Huprey Co. is the defendant in the following legal claims. For each of following claims, does...
Huprey Co. is the defendant in the following legal claims. For each of following claims, does Huprey (a) Record liability. (b) Disclose in notes, or ( No disclosure. 1. Huprey is very likely to lose a pending lawsuit. It reasonably estimates that damages paid will be $1 million • Record liability No disclosure. Disclose in notes 2. There is a remote (unlikely) chance Huprey will lose a pending lawsuit. The plaintiff is suing Huprey for $5 million Record liability No...
Problem 8-7B Record contingencies (LO8-5) Compact Electronics is a leading manufacturer of digital camera equipment. Assume...
Problem 8-7B Record contingencies (LO8-5) Compact Electronics is a leading manufacturer of digital camera equipment. Assume the following transactions occur during the year ended December 31, 2021. 1. Accounts receivable were $27.2 million (all credit) at the end of 2021. Although no specific customer accounts have been shown to be uncollectible, the company estimates that 2% of accounts receivable will eventually prove uncollectible. 2. Compact Electronics is the plaintiff in a $3.2 million lawsuit filed against a supplier. The suit...
Please read the article and answer about questions. You and the Law Business and law are...
Please read the article and answer about questions. You and the Law Business and law are inseparable. For B-Money, the two predictably merged when he was negotiat- ing a deal for his tracks. At other times, the merger is unpredictable, like when your business faces an unexpected auto accident, product recall, or government regulation change. In either type of situation, when business owners know the law, they can better protect themselves and sometimes even avoid the problems completely. This chapter...
S11-12 Accounting treatment for contingencies Freeman Motors, a motorcycle manufacturer, had the following contingencies. a. Freeman estimates that it is reasonably possible but not likely that it will lose a current lawsuit. Freeman's attorneys estimate the potential loss will be $4,500,000. b. Freeman received notice that it was being sued. Freeman considers this lawsuit to be frivolous. I c. Freeman is currently the defendant in a lawsuit. Freeman believes it is likely that it will lose the lawsuit and estimates...
Huprey Co. is the defendant in the following legal claims. For each of following claims, does Huprey (a) Record liability. (b) Disclose in notes, or ( No disclosure. 1. Huprey is very likely to lose a pending lawsuit. It reasonably estimates that damages paid will be $1 million • Record liability No disclosure. Disclose in notes 2. There is a remote (unlikely) chance Huprey will lose a pending lawsuit. The plaintiff is suing Huprey for $5 million Record liability No...
Problem 8-7B Record contingencies (LO8-5) Compact Electronics is a leading manufacturer of digital camera equipment. Assume the following transactions occur during the year ended December 31, 2021. 1. Accounts receivable were $27.2 million (all credit) at the end of 2021. Although no specific customer accounts have been shown to be uncollectible, the company estimates that 2% of accounts receivable will eventually prove uncollectible. 2. Compact Electronics is the plaintiff in a $3.2 million lawsuit filed against a supplier. The suit...
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