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Elena L [17]
2 years ago
13

Barry Company has a calendar year-end. On December 15, Year 1, a customer was injured using a product manufactured by Barry. Tha

t customer files a lawsuit against Barry on January 15, Year 2. On February 15, Year 2, Barry’s attorney advises Barry to settle the claim for $100,000 because a loss in that amount is probable and material. Barry has not yet distributed its Year 1 financial statements. What must Barry do with regards to those financial statements?
Business
1 answer:
mart [117]2 years ago
4 0

Answer:

Record the loss contingency in the December 31, Year 1, balance sheet and also disclose the lawsuit in the footnotes.

Explanation:

Since the loss is both probable and material, then it must be recorded as a liability in the balance sheet. This is a loss contingency, and depending on whether the probability of occurrence is probable, possible or not possible, and the amount can be determined, then it will be recorded in the balance sheet, included in the footnotes or not considered.

Since the loss is probable and it can be quantified, plus the incident occurred during last year, then the loss contingency must be included as a liability. The company should also disclose the lawsuit in the footnotes.

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A project has cash flows of −$161,900, $60,800, $62,300, and $75,000 for Years 0 to 3, respectively. The required rate of return
Degger [83]

Answer:

Therefore, the internal rate of return is lower than the expected return, for this the project must be rejected

Explanation:

Solution

Given that

The cash flow of a project consists of the following amount from year 0 to 3 = −$161,900, $60,800, $62,300, and $75,000

The rate of return required = 13%

Now,

Let the Internal rate of return be y%

Thus,

At internal rate of return, the value of present inflows is the same as the value of present outflows.

So,

Internal rate of return = Value of present inflows = Value of present outflows

=161900 =60800/1.0y +62300/1.0 y ^2 + 75000/ 1,0 y^3

Therefore, y = internal rate of return 10.41%

7 0
2 years ago
Organizations with low turnover and satisfied employees tend to perform better. On the other side of the coin, organizations hav
miskamm [114]

Answer:

Answer is explained in the explanation section below.

Explanation:

Voluntary Turnover:

Better Job: If an employee is offered a better job, he may choose to quit his current position.

Careers: If an employee is career-oriented and wishes to pursue higher education, he will willingly leave his employment.

Retirement: When an employee reaches the legal working age, he retires, which is referred to as voluntary retirement.

Involuntary Turnover:

Workplace Violence: An employer may decide to fire an employee who engages in workplace violence. This is what is known as spontaneous turnover.

Violating: If an employee is found to be in breach of the company's rules, he will be dismissed, resulting in involuntary turnover.

Employee layoffs: Forced turnover occurs when a company's employees are laid off in large numbers.

Employment at-will doctrine:

For some reason: This allows the employer to fire an employee for any cause.

Promise: Neither the employer nor the employee has made any commitments to each other.

Refusing to state the reason for the employee's termination: If the employer refuses to state the reason for the employee's termination,

3 0
2 years ago
The institution-based view driving alliances and acquisitions focuses on _____ concerns.
Georgia [21]

Answer: (A) Antitrust

Explanation:

Antitrust is one of the type of law that basically monitor the economical power distribution in terms of business.

It is basically refers to the competitive law which is developed by the united state government for protecting the consumers from the various types of business practices.

It mainly ensure that the fairness in the competition in the market. Antitrust concerns are mainly focus on the institutional acquisitions and the alliances.

Therefore, Option (A) is correct.

7 0
2 years ago
What are three critical questions that entrepreneurs need to ask themselves while starting a business? Which location would be t
ioda

Answer:

1.) Which location would be the most advantageous for my business.

2.) What business structure would best suit my business?

3.) What is the total cost of ownership of my capital purchases

Explanation:

Location: Siting a business location is widely regarded as one of the most critical decision one has to make when starting a business. A locaction which is accessible and also harbors the business choice of consumer.

2.) Business Structure : Careful planning, perusal and adoption of a model for one's business is a very essential decision to be at the beginning of a startup. Entrepreneurs may need to decide if embarking on a business alone or partnering with an already existing company or partner will reap the most benefit.

3.) Cost of ownership of capital purchase:

Capital purchases are very essential in starting a business. It incorporates building, facilities and essential equipment needed to run the business. Estimating the cost is very important while preparing for begin a start-up.

5 0
2 years ago
Jason Jewelers reported the following in its statement of cash flows: Net cash provided by operating activities $140,000 Net cas
Elodia [21]

Answer:

The total net increase in cash is $ 110,000

Explanation:

Net Increase (Decrease) in Cash = Net cash provided/(used) by operating activities + Net cash provided/(used) by investing activities + Net cash provided/(used) by financing activities.

Net Increase (Decrease) in Cash= $140,000 + $120,000 -$ 150,000

                                                      = $ 110,000

This represents increase in cash inflow .

6 0
2 years ago
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