Identify the current liabilities of Company D and to compute working capital and also to provide the importance of working capital to the management.

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Answer 1

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Definition Definition Costs that a business is responsible for paying, should a particular event potentially occur in the future. Also called a potential liability, a contingent liability is generally recorded only when the amount of liability can be reasonably estimated and the contingency is likely to occur shortly. The Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Principles (IFRS) make it mandatory for the companies to record any contingent liability taking the principles of full disclosure, materiality, and prudence into consideration.

Chapter 9, Problem 9.1E

1.

To determine

Identify the current liabilities of Company D and to compute working capital and also to provide the importance of working capital to the management.

2.

To determine

Explain whether there will be change in the computation if the company reported $250,000 worth of contingent liabilities in the notes to its financial statement.

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mighty Manny, Incorporated manufactures ice scrapers and distributes them across the midwestern United States. Mighty Manny is incorporated and headquartered in Michigan. It has product sales to customers in Illinois, Indiana, Michigan, Minnesota, and Wisconsin. It has sales personnel only in the states discussed and all these states have adopted Wayfair legislation. Determine the state in which Mighty Manny does not have sales and nexus given the following scenarios:

Please provide the answer to this general accounting question with proper steps.

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Answer 2

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Definition Definition Costs that a business is responsible for paying, should a particular event potentially occur in the future. Also called a potential liability, a contingent liability is generally recorded only when the amount of liability can be reasonably estimated and the contingency is likely to occur shortly. The Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Principles (IFRS) make it mandatory for the companies to record any contingent liability taking the principles of full disclosure, materiality, and prudence into consideration.

Chapter 9, Problem 9.1E

1.

To determine

Identify the current liabilities of Company D and to compute working capital and also to provide the importance of working capital to the management.

2.

To determine

Explain whether there will be change in the computation if the company reported $250,000 worth of contingent liabilities in the notes to its financial statement.

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Answer 3

Question

Definition Definition Costs that a business is responsible for paying, should a particular event potentially occur in the future. Also called a potential liability, a contingent liability is generally recorded only when the amount of liability can be reasonably estimated and the contingency is likely to occur shortly. The Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Principles (IFRS) make it mandatory for the companies to record any contingent liability taking the principles of full disclosure, materiality, and prudence into consideration.

Chapter 9, Problem 9.1E

1.

To determine

Identify the current liabilities of Company D and to compute working capital and also to provide the importance of working capital to the management.

2.

To determine

Explain whether there will be change in the computation if the company reported $250,000 worth of contingent liabilities in the notes to its financial statement.

Expert Solution & Answer

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Answer 4

Question

Definition Definition Costs that a business is responsible for paying, should a particular event potentially occur in the future. Also called a potential liability, a contingent liability is generally recorded only when the amount of liability can be reasonably estimated and the contingency is likely to occur shortly. The Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Principles (IFRS) make it mandatory for the companies to record any contingent liability taking the principles of full disclosure, materiality, and prudence into consideration.

Chapter 9, Problem 9.1E

1.

To determine

Identify the current liabilities of Company D and to compute working capital and also to provide the importance of working capital to the management.

2.

To determine

Explain whether there will be change in the computation if the company reported $250,000 worth of contingent liabilities in the notes to its financial statement.

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Answer 5

Chapter 9, Problem 9.1E

1.

To determine

Identify the current liabilities of Company D and to compute working capital and also to provide the importance of working capital to the management.

2.

To determine

Explain whether there will be change in the computation if the company reported $250,000 worth of contingent liabilities in the notes to its financial statement.

Answer 6

Chapter 9, Problem 9.1E

1.

To determine

Identify the current liabilities of Company D and to compute working capital and also to provide the importance of working capital to the management.

Answer 7

Chapter 9, Problem 9.1E

1.

To determine

Identify the current liabilities of Company D and to compute working capital and also to provide the importance of working capital to the management.

Answer 8

2.

To determine

Explain whether there will be change in the computation if the company reported $250,000 worth of contingent liabilities in the notes to its financial statement.

Answer 9

2.

To determine

Explain whether there will be change in the computation if the company reported $250,000 worth of contingent liabilities in the notes to its financial statement.

Answer 10

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Answer 11

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Answer 12

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Answer 13

Ch. 9 - Prob. 1Q Ch. 9 - Prob. 2Q Ch. 9 - Prob. 3Q Ch. 9 - Prob. 4Q Ch. 9 - Prob. 5Q Ch. 9 - Prob. 6Q Ch. 9 - Prob. 7Q Ch. 9 - Define deferred revenue. Why is it a liability?Ch. 9 - Prob. 9Q Ch. 9 - Define working capital. How is working capital...

Identify the current liabilities of Company D and to compute working capital and also to provide the importance of working capital to the management.

Solution Summary: The author identifies the current liabilities of Company D and computes working capital. Working capital helps management manage between its short-term obligations and resources actively.

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Identify the current liabilities of Company D and to compute working capital and also to provide the importance of working capital to the management.

Explain whether there will be change in the computation if the company reported $250,000 worth of contingent liabilities in the notes to its financial statement.

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