BUSINESS COLLEGE

Star Company has a contingent liability that has a likelihood of actual occurrence that is classified as probable. Also, the amount of the liability can be reasonably estimated. Under these circumstances, Star is required to

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Answer 1
Answer:

Answer:

recognize a liability and an expense in its financial statements.

Explanation:

Contingent liability refers to a liability that arises in some unpredictable future event. In this, the amount is expected or predicted.

Here in the question the actual occurrence would be categorized also its amount would be predicted so the same is to be recorded as a liability and recorded as an expense in the financial statement i.e. balance sheet & income statement

Related Questions

EB7. LO 1.4Indicate whether each of the following statements is true or false.Section 302 of Sarbanes-Oxley requires the CEO and CFO to review all financial reports and sign the reports.One of the three questions put forth by the Institute of Business Ethics is "Do I mind others knowing what I have done?"Ethical issues may be faced on a small scale, such as making a business decision to produce excess inventory for the sole purpose of trying to influence managers’ bonuses.A manager who spends excess budgeted funds remaining at the end of a fiscal year on unnecessary expenditures thinking that it is better to "use it than lose it" is acting ethically.The Foreign Corrupt Practices Act was implemented in 2001 to protect investors by enhancing the accuracy and reliability of corporate financial statements and disclosures.
In the month of June, a department had 8000 units in beginning work in process that were 70% complete. During June, 32000 units were transferred into production from another department. At the end of June there were 4000 units in ending work in process that were 40% complete. Materials are added at the beginning of the process, while conversion costs are incurred uniformly throughout the process (Please show work)A. How many units were transfered out of the process in june________B.The equivalent units of production for materials in June were _______C. The equivalent units of production for conversion costs for June were_______
TO GO! writes and manufactures murder mystery parlor games that it sells to retail stores. The following is per-unit information relating to the manufacture and sale of this product. Unit sales price $ 30 Variable cost per unit 6 Fixed costs per year 360,000 a. Determine the contribution margin ratio. b. Determine the sales volume (in dollars) required to break even. c. Determine the sales volume (in dollars) required to earn an annual operating income of $440,000. d. Determine the margin of safety (in dollars) if annual sales total 60,000 units.
Comparative financial statements for Weller Corporation, a merchandising company, for the year ending December 31 appear below. The company did not issue any new common stock during the year. A total of 860,000 shares of common stock were outstanding. The interest rate on the bonds, which were sold at their face value, was 12%. The income tax rate was 40% and the dividend per share of common stock was $0.40 this year. The market value of the company’s common stock at the end of the year was $21. All of the company’s sales are on account.Weller CorporationComparative Balance Sheet(dollars in thousands)This Year Last YearAssets Current assets: Cash $ 976 $ 1,920 Accounts receivable, net 15,000 10,050 Inventory 10,000 8,440 Prepaid expenses 1,860 2,220 Total current assets 27,836 22,630 Property and equipment: Land 6,600 6,600 Buildings and equipment, net 19,800 19,600 Total property and equipment 26,400 26,200 Total assets $ 54,236 $ 48,830 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 10,100 $ 8,600 Accrued liabilities 720 1,000 Notes payable, short term 360 360 Total current liabilities 11,180 9,960 Long-term liabilities: Bonds payable 6,250 6,250 Total liabilities 17,430 16,210 Stockholders' equity: Common stock 860 860 Additional paid-in capital 4,500 4,500 Total paid-in capital 5,360 5,360 Retained earnings 31,446 27,260 Total stockholders' equity 36,806 32,620 Total liabilities and stockholders' equity $ 54,236 $ 48,830 Weller CorporationComparative Income Statement and Reconciliation(dollars in thousands)This Year Last YearSales $ 85,000 $ 80,000 Cost of goods sold 55,000 51,000 Gross margin 30,000 29,000 Selling and administrative expenses: Selling expenses 9,100 8,600 Administrative expenses 12,600 11,600 Total selling and administrative expenses 21,700 20,200 Net operating income 8,300 8,800 Interest expense 750 750 Net income before taxes 7,550 8,050 Income taxes 3,020 3,220 Net income 4,530 4,830 Dividends to common stockholders 344 645 Net income added to retained earnings 4,186 4,185 Beginning retained earnings 27,260 23,075 Ending retained earnings $ 31,446 $ 27,260 Required: Compute the following financial data for this year:1. Gross margin percentage. (Round your percentage answer to 1 decimal place (i.e., 0.1234 should be entered as 12.3).)2. Net profit margin percentage. (Round your percentage answer to 1 decimal place (i.e., 0.1234 should be entered as 12.3).)3. Return on total assets. (Round your percentage answer to 1 decimal place (i.e., 0.1234 should be entered as 12.3).)4. Return on equity. (Round your percentage answer to 2 decimal places (i.e., 0.1234 should be entered as 12.34).)
During March, Zea Inc. transferred $55,000 from Work in Process to Finished Goods and recorded a Cost of Goods Sold of $61,000. The journal entries to record these transactions would include a:

What does a MRTS​ = ​mean? It means that if the input on the horizontal axis is increased by one​ unit, then the input on the vertical axis ▼ increases decreases by units and output will ▼ increase decrease not change .

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Answer:

MRTS​ means that if the input on the horizontal axis is increased by one​ unit, then the input on the vertical axis decreases by units and output will not change.

Explanation:

The marginal rate of technical substitution (MRTS) can be described as the amount by which one input's quantity must be decreased when an additional unit of another input is used to keep output constant. MRST is also known as technical rate of substitution.

Therefore, MRTS​ means that if the input on the horizontal axis is increased by one​ unit, then the input on the vertical axis decreases by units and output will not change.

Gebler Company sells a product for $ 70 per unit. Variable costs are $ 25 per​ unit, and fixed costs are $ 2 comma 500 per month. The company expects to sell 570 units in September. Prepare an income statement for September using the contribution margin format.

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Answer:

Instructions are listed below

Explanation:

Giving the following information:

Gebler Company sells a product for $ 70 per unit.

Variable costs are $ 25 per​ unit.

Fixed costs are $ 2500 per month.

The company expects to sell 570 units in September.

Contribution income statement:

Sales= 70*570= $39,900

Variable costs= 570*25= 14250

Contribution margin= 25,650

Fixed costs= 2500

Net income= $23,150

The marginal benefit from consuming another unit of a good: equals the total benefit obtained from the consumption of all prior units. equals the increase in total benefits from consuming the unit. must be less than the marginal cost or the unit will not be consumed. must equal the marginal cost or the unit will not be consumed.

Answers

Answer:

Equals the increase in total benefits from consuming the unit.

Explanation:

This is defined as a maximum amount a consumer is willing to pay for an additional good or service.

It is also the additional satisfaction or utility that consumer receives when the additional good or service is purchased. The marginal benefit for a consumer tends to decreases as consumption of the good or service increases.

In the business world, the marginal benefit for producers is often referred to as marginal revenue.

During 2018, Colorado Company stock was sold for $9,400. The fair value of the stock on December 31, 2018, was Clemson Corp. stock—$19,100; Buffaloes Co. stock—$20,500. None of the equity investments result in significant influence. (a) Prepare the adjusting journal entry needed on December 31, 2017. (b) Prepare the journal entry to record the sale of the Colorado Co. stock during 2018. (c) Prepare the adjusting journal entry needed on December 31, 2018.

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Explanation:

The journal entries are as follows

a. Unrealized Holding Gain or Loss Dr $1,310

                      To Fair value Adjustment  $1,310

(Being the unrealized gain or loss is recorded)

2. Cash $9,410

   Loss on Sale of Investment  $490     ($9,900 - $9,410)

                  To Equity Investment  $9,900

(Being the sale of the stock is recorded)

3. Fair value Adjustment  $1,020

             To  Unrealized Holding Gain or Loss  $1,020

(Being the fair value adjustment is recorded)

The computation is shown below:

Stock                              Cost                  Fair Value      Unrealized Gain(Loss)

Clemson Corp. Stock    $20,200           $19,410          -$790

Buffaloes Co. stock       $20,200           $20,700         $500

Net unrealized gain (loss)                                            -$290

2017                                                                                -$1,310

Fair value adjustment                                                   -$1,020

An important tool in predicting the volume of activity, the costs to be incurred, the sales to be made, and the profit to be earned is: Multiple Choice Target income analysis.
Cost-volume-profit analysis.
Least-squares regression analysis.
Variance analysis.
Process costing.

Answers

Answer:

Cost volume profit Analysis

Explanation:

Cost volume profit Analysis is a tool which depicts the relationship between level of activity, revenue , cost and profit. It is an important tool adopted by accountants to help carry out any of the following analyses:

Break-even point - The level of activity to achieve a zero profit. Where no profit or loss is made .

Target profit Analysis; The level of activity to be that would he;p achieve a specific amount of profit

Margin of safety - To determine the amount by which budgeted sales exceeds the break-even sales

Trade-offs must be made among space, labor, and ____ with respect to warehousing design. Group of answer choices Construction materials Speed Mechanization Cost

Answers

Answer:

Mechanization

Explanation:

When a ware house is being setup, the aim is to get an efficient one that can service demand in a timely manner.

In order to minimise cost and maximise efficiency there is need to space, labour, and mechanisation that will be used on the production process.

Various analysis like capacity analysis and equipment analysis are carried out to ensure fast and cheap operation of the warehouse.

Inefficient warehouse designs leads to delay in service delivery and extra cost to the business.
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