A company owns a machine with a $10,000 carrying value, $5,000 estimated salvage value, and $90,000 fair value. The machine was irreparably damaged by a customer and, as a result, was deemed worthless. A court awarded damages of $90,000 in favor of the company. At the current year end, the outcome of this case was awaiting appeal and was, therefore, uncertain. However, the company's legal counsel believes the appeal will be denied. What amount of gain, if any, should the company report for this lawsuit in its current-year financial statements? A. $0 B. $75,000 C. $80,000 D. $90,000

A company owns a machine with a $10,000 carrying value, $5,000 estimated salvage value, and $90,000 fair value. The machine was irreparably damaged by a customer and, as a result, was deemed worthless. A court awarded damages of $90,000 in favor of the company. At the current year end, the outcome of this case was awaiting appeal and was, therefore, uncertain. However, the company's legal counsel believes the appeal will be denied. What amount of gain, if any, should the company report for this lawsuit in its current-year financial statements? A. $0 B. $75,000 C. $80,000 D. $90,000

Business Its Legal Ethical & Global Environment

10th Edition

ISBN:9781305224414

Author:JENNINGS

Publisher:JENNINGS

Chapter11: Environmental Regulation And Sustainability

Section: Chapter Questions

Problem 3QAP

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Superb Corporation is being sued for illness caused to local residents as a result of negligence on the company's part in permitting the local residents to be exposed to highly toxic chemicals from its plant. Superb's lawyer states that it is probable that Superb will lose the suit and be found liable for a judgment costing Superb anywhere from $1,200,000 to $6,000,000. However, the lawyer states that the most probable cost is $3,600,000. As a result of the above facts, Superb should accrue Select one: а. no loss contingency but disclose a contingency of $1,200,000 to $6,000,000. O b. a loss contingency of $1,200,000 and disclose an additional contingency of up to $4,800,000. Ос. a loss contingency of $3,600,000 but not disclose any additional contingency. O d. a loss contingency of $3,600,000 and disclose an additional contingency of up to $2,400,000.
On January 3, 2010, Boyer Corp. owned a machine that had cost $200,000. The accumulated depreciation was $120,000, estimated salvage value was $12,000, and fair market value was $320,000. On January 4, 2010, this machine was irreparably damaged by Pine Corp. and became worthless. In October 2010, a court awarded damages of $320,000 against Pine in favor of Boyer. At December 31, 2010, the final outcome of this case was awaiting appeal and was, therefore, uncertain. However, in the opinion of Boyer's attorney, Pine's appeal will be denied. At December 31, 2010, what amount should Boyer accrue for this gain contingency? O 200.000 O 260,000 None of these O 320,000
Buchanan Company recently was sued by a competitor for patent infringement. Attorneys have determined that it is probable that Buchanan will lose the case and that a reasonable estimate of damages to be paid by Buchanan is $300,000. In light of this case, Buchanan is considering establishing a $100,000 self-insurance allowance. What entry(ies), if any, should Buchanan record to recognize this loss contingency?
Swifty Corporation is being sued for illness caused to local residents as a result of negligence on the company's part in permitting the local residents to be exposed to highly toxic chemicals from its plant. Swifty's lawyer states that it is probable that Swifty will lose the suit and be found liable for a judgment costing Swifty anywhere from $ 1830000 to $ 8960000. However, the lawyer states that the most probable cost is $ 5410000. As a result of the above facts, Swifty should accrue a loss contingency of $ 1830000 and disclose an additional contingency of up to $ 7130000. a loss contingency of $ 5410000 and disclose an additional contingency of up to $ 3550000. no loss contingency but disclose a contingency of $ 1830000 to $ 8960000. a loss contingency of $ 5410000 but not disclose any additional contingency.
Bu Co. is being sued for illness caused to local residents as a result of negligence on the company's part in permitting the local residents to be exposed to highly toxic chemicals from its plant. Bu's lawyer states that it is probable that Bu will lose the suit and be found liable for a judgment costing Bu anywhere from P1,600,000 to P8,000,000. However, the lawyer states that the most probable cost is P 4,800,000. As a result of the above facts, Bu should accrue: *a. a loss contingency of P 4,800,000 and disclose an additional contingency of up to P 3,200,000b. a loss contingency of P 1,600,000 and disclose an additional contingency of up to P 6,400,000c. a loss contingency of P 4,800,000 but not disclose any additional contingencyd. no loss contingency but disclose a contingency of P 1,600,000 to P 8,000,000
Vinson Co is being sued for illness caused to local residents as a result of negligence on the company's part in permitting the local residents to be exposed to highly toxic chemicals from its plant. Vinson's lawyer states that it is probable that Vinson will lose the suit and be found liable for a judgment costing Vinson anywhere from $600,000 to $3,000,000. However, the lawyer states the most probable cost is $1,800,000. As a result of these facts, Vinson should accrue: O a loss contingency of $600,000 and disclose an additional contingency of up to $2,400,000 O a loss contingency of $1.800,000 and disclose an additional contingency of up to $1,200,000 O a loss contingency of $1.800.000 but NOT disclose any additional contingency. O no loss contingency but disclose a contingency of $600,000 to $3.000.000
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H company was shed for permitting local residents to be exposed to toxic chemicals from its plant, the company lost its suit. Lawyers concluded that it is probably that the company will be liable for judgment costing any Where from birr 800000 to be birr 120000but no specific amount is estimated how much litigation liability the company should accrue
Pitchfork Company is being sued by a competitor in a lawsuit alleging patent infringement. Pitchfork's lawyers state that it is possible Pitchfork will lose the suit and be found liable for a judgment costing anywhere from $1,800,000 to $9,000,000. However, the lawyers state that no one estimate is more likely. As a result of the above information, Pitchforks should report: a contingent liability in the amount of $5,400,000, representing the average amount within the range of damages, on its Balance Sheet and disclose an additional contingency of up to $3,600,000 in the notes to the Balance Sheet. a contingent liability in the amount of $1,800,000 on its Balance Sheet and disclose an additional contingency of up to $7,200,000 in the notes to the Balance Sheet. a contingent liability in the amount of $5,400,000 on its Balance Sheet, but not disclose any additional contingency. O a possible contingency of between $1,800,000 and $9,000,000 only in the notes of the 10K.
A lawsuit has been filed against Sunland Company for wrongful termination. Sunland's legal counsel had encouraged the company to settle because it is likely they will lose the case. The amount of the loss is estimated to be between $573000 and $1062000. Legal counsel believes that the case could be settled for $864000. Sunland should report O a contingent liability for $864000. O an estimated liability for $573000. O a contingent loss of $1062000. O no loss or liability until the case is settled. Attempts: 0 of 1 used Submit Answer
Subject: acounting
After recording depreciation for the current year, Media Mania Incorporated decided to discontinue using its printing equipment. The equipment had cost $748,000, accumulated depreciation was $547,000, and its fair value (based on estimated future cash flows from selling the equipment) was $48,000. Determine whether the equipment is impaired. Prepare the journal entries to record the impairment in asset if any. Fill in the blank : The fair value is ________ and the book value is ___________ , therefore this asset (is/is not) impaired Record journal entry to remove accumulated depreciation Record journal entry for the impairment loss