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ipn [44]
2 years ago
15

Blythe Corp. is a defendant in a lawsuit. Blythe's attorneys believe it is reasonably possible that the suit will require Blythe

to pay a substantial amount. What is the proper financial statement treatment for this contingency?
Business
2 answers:
8090 [49]2 years ago
7 0

Answer:

The entry is not required because the outcome is reasonably possible, not certain or probable. So IAS 37 says that the liability must not be recognized as the outcome is not reasonably certain or probable.

Explanation:

The liability must be included in the financial statement only if the outcome is certain or probable. In this scenario, the outcome is reasonably possible but neither certain nor probable in this situation. So the entry in the financial statement is not required. If the liability is of a huge amount then IAS 37 says that their must be a disclosure in the financial statement notes about the lawsuit.

Monica [59]2 years ago
4 0

Answer:

US GAAP requires that contingent liabilities (e.g. lawsuits) must be disclosed in the footnotes of the financial statements of Blythe Corporation. If the contingent liability qualifies as probable and a reasonable cost can be estimated, then it must also be reported as a liability in the balance sheet. But since this lawsuit is only reasonably possible, not probable, then it doesn't need to be included in the balance sheet.

As a general thumb rule, we can assume that probable means that the chance of losing is more than 50%, while possible means that there is a 50/50 chance.

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Compton Associates is an architectural firm that has been in practice only a few years. Because it is a relatively new firm, the
Deffense [45]

Answer:

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Explanation:

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2 years ago
Bess wrote four checks last month, and these were the only transactions for her checking account. According to her check registe
Rzqust [24]
It looks tricky but its actually simple. Bank statement shows balance is $1054.13 while Bess check register shows $869.96. For us to know the amount of the check that was not approved is to get the difference of the bank statement and Bess check register. $1054.13 minus 869.96 is $184.17. Therefore, the answer is letter B.
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2 years ago
A new children's hospital is being built in Springfield, and Friendly Corp. has publicly pledged that it will contribute $5 mill
frozen [14]

Answer:

Following are the solution to this question:

Explanation:

By IAS 1 — Annual Report presentation, 3 concepts were all first consideration, its second consistency as well as the third reporting framework related to investment based that can be define as follows:

  • Full accrual basis: its IAS 1 allows an organization to compile all financial reports through an accounting standards basis, with exception of working capital details. Even more cash accounting is a method to record profit or expenditure account balances when they are made.
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  • Thus the allocation of 2 million to the year that the Pleasant Corp. was created must be listed as just an expense. As well as the remaining payment amount must be listed as expenses once it is paid. Future interventions throughout the current FY should not be published.
  • Also, notice the payment incoming to ensure that you will be prepared when due, but just don't join the way of supporting using the cash method. It simply reports an expense of what you are pay if you make a payment when you choose to use the cash method. Consequently, until the next date, you would not modify your reporting, which is also known as journal entries.
5 0
2 years ago
Miko owns a lake house that she rents to vacationers. Miko gives her son Ninh a trip to Omaha on his graduation from community c
ss7ja [257]

Answer:

The sale of Miko's car to Pye for $4,500

Explanation:

Article 2 of the uniform commercial code (UCC) covers the sale of goods, but it doesn't cover the sale of services, securities or real property.

The only transaction that involves the sale of goods happened when Miko sold her car to her neighbor. When you rent something, you are providing a service, the same happens with a trip (transportation and lodging services).

3 0
2 years ago
If the probability is 0.54 that Stock A will increase in value during the next month and the probability is 0.68 that Stock B wi
Natali5045456 [20]

Answer:

The probability that neither of both stocks increase  is 0,14

Explanation:

The Complement Rule states that the sum of the probabilities of an event and its complement must equal 1.

The data  we have is the probability that Stock A or B increase,  we are looking for the probability that neither occur,  so we have to use the complement of each one.  

Complement of Stock A =1-0.54=0.46

Complement of Stock B =1-0.68=0.32

If we want to know the probability of both events happening we have to multiply both complements.  

Probability that neither of these two events will occur= 0.46 x0.32= 0,1472‬

7 0
2 years ago
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