Concept explainers
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Introduction:The liabilities of a business which is either uncertain or the amount of which is not estimated correctly are contingencies. A liability is recorded when there is certainty of it happening with the amount of loss. A contingency is disclosed in notes when either happening of liability is not certain or either the amount of loss is not estimated. A contingency is not recorded when there is no possibility of it happening.
To determine: The option that H will choose for the given case. Options are (a) record a liability (b) disclose a liability or (c) have no disclosure.
2
Introduction:The liabilities of a business which is either uncertain or the amount of which is not estimated correctly are contingencies. A liability is recorded when there is certainty of it happening with the amount of loss. A contingency is disclosed in notes when either happening of liability is not certain or either the amount of loss is not estimated. A contingency is not recorded when there is no possibility of it happening.
To determine: The option that H will choose for the given case. Options are (a) record a liability (b) disclose in notes or (c) have no disclosure.
3
Introduction:The liabilities of a business which is either uncertain or the amount of which is not estimated correctly are contingencies. A liability is recorded when there is certainty of it happening with the amount of loss. A contingency is disclosed in notes when either happening of liability is not certain or either the amount of loss is not estimated. A contingency is not recorded when there is no possibility of it happening.
To determine: The option that H will choose for the given case. Options are (a) record a liability (b) disclose in notes or (c) have no disclosure.
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Chapter 9 Solutions
Gen Combo Ll Financial Accounting: Information For Decisions; Connect Ac
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- Arlington Supplies Ltd. manufactures and sells cardboard boxes. The stock of boxes was included in the closing inventory as of December 31, 2010, at a cost of $65 each per bundle. During the final audit, the auditors noted that the subsequent sale price for the inventory on January 20, 2011, was $50 per bundle. Additionally, an inquiry revealed that during the physical stock take, a storage issue led to minor water damage, affecting the structural integrity of the boxes. As a result, Arlington Supplies Ltd. spent $18 per bundle for drying and reinforcing the boxes. The net realizable value and inventory write-down (loss) amount to: (a) $50 and $15 respectively. (b) $47 and $18 respectively. (c) $32 and $33 respectively. (d) $40 and $25 respectively. (e) $35 and $30 respectively.arrow_forwardHiii, Tutor give answer to this problemarrow_forwardAlpha Corp. produces and sells a single product. The company's contribution format income statement for the month reports: • Sales (7,500 units) = $225,000 • Variable expenses = $112,500 • Contribution margin = $112,500 • Fixed expenses = $85,000 • Net operating income = $27,500 If Alpha Corp. sells 8,000 units, what is the total contribution margin?arrow_forward
Intermediate Accounting: Reporting And AnalysisAccountingISBN:9781337788281Author:James M. Wahlen, Jefferson P. Jones, Donald PagachPublisher:Cengage Learning