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sveta [45]
2 years ago
8

You are auditing Rodgers and Company. You are aware of a potential loss due to noncompliance with environmental regulations. Man

agement has assessed that there is a​ 40% chance that a​ $10M payment could result from the​ non-compliance. The appropriate financial statement treatment is to
A. since there is less than a​ 50% chance of​ occurrence, ignore.
B. since there is greater that a remote chance of​ occurrence, accrue the​ $10 million.
C. accrue a​ $4 million liability.
D. disclose a liability and provide a range of outcomes.
Business
1 answer:
aniked [119]2 years ago
4 0

Answer:

D. disclose a liability and provide a range of outcomes.

Explanation:

As there are 40% chances to the outcome that liability will occur, it is not nominal to be ignored. And therefore, it shall be shown in the balance sheet, as a note, with different possibilities and their expected results.

As the amount attached is huge and that the company shall not ignore such a coming liability, as if it do not happen, it can be reversed, and if it does the company shall be ready to have the liability in case of any default.

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"Our business needs a steady supply of raw milk," said Beatrice Gomez, CEO of Bea's Ice Cream, "But Holly Dairy Farms is unable
kenny6666 [7]

Answer:

vertical integration strategy

Explanation:

In supply chain management, vertical integration refers to expanding the company's operations to either include some of its vendors, distributors and retailers, or both. This way, the company will be able to control the upstream of the supply chain management (vendors) and/or the downstream (distributors and retailers).

In this case, Beatrice is advocating for a vertical integration strategy in order for the company to expand into dairy farms. This way they company will control the supply of raw milk.

3 0
2 years ago
Stellar Plastics is analyzing a proposed project with annual depreciation of $19,500 and a tax rate of 34 percent. The company e
marysya [2.9K]

Answer:

$20,226

Explanation:

expected sales = 11,400 - 12,000 - 12,600

expected sales price = $7.20 - $7.50 - $7.80

expected variable cost = $3.072 - $3.20 - $3.328

total fixed costs = $31,000

if you use an excel spreadsheet you can calculate all the different possible simulations and combine all the expected sales x 3 different price levels x 3 different variable costs and 1 fixed cost. Once you get all the 27 possible solutions, you just get the average.

I attached it because there is no room here.

Download pdf
0 0
1 year ago
Mentally estimate the total cost of items that have the following prices: $1.85, $.98, $3.49, $9.78, and $6.18. Round off your a
Nonamiya [84]

Answer: Option (c) is correct.

Explanation:

Given that,

Round off the values of items to the nearest half dollar are as follows:

Item 1 = $2.00

Item 2 = $1.00

Item 3 = $3.50

Item 4 = $10.00

Item 5 = $6.00

Estimated total cost of items = Item 1 + Item 2 + Item 3 + Item 4 + Item 5

= $2.00 + $1.00 + $3.50 + $10.00 + $6.00

= $22.50

Hence, nearest value is $22.50.

Therefore, option (c) is correct.

8 0
1 year ago
Mayan Company had net income of $32,670. The weighted-average common shares outstanding were 9,900. The company declared a $4,60
Lana71 [14]

Answer:

The correct option is A ,earnings per share is $2.84

Explanation:

Earnings per share is given earnings attributable to ordinary shareholders divided weighted average common shares.

The net income needs to be adjusted to reflect only earnings distributable to common shares.

Earnings to common stocks=$32670-$4600

                                              =$28070

Weighted average common shares=9900

Earnings per share=$28070/9900

                                =$2.84 per share

Option B is wrong because it calculated earnings per share with net income instead of earnings of common shareholders($32670/9900=$3.30)

4 0
1 year ago
Wells Company's delivery truck, which originally cost $70,000, was destroyed by fire. At the time of the fire, the balance of th
beks73 [17]

Answer:

D) $17,500 gain.

Explanation:

Wells Company should record the following transactions:

  • Dr  Cash account 40,000
  • Dr Accumulated Depreciation Vehicles account 47,500
  • Cr Vehicle account 70,000
  • Cr Gain on Disposal account 17,500

$40,000 in cash was received and the accumulated depreciation balance should equal to zero, therefore they must be debited.

The vehicles account balance should equal zero and the rest is gain on disposal, therefore they must be credited.

4 0
1 year ago
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