sales due should be recognized in eVade’s financial statements? According to FASB ASC 450-20-25-2, in order to recognized a loss contingency, two of the following conditions have to be met; information available before the financial statements are issued or are available to be issued indicates that it is probable that an asset had been impaired or a liability had been incurred at the date of the financial statements and the amount of loss can reasonably be estimated. Since eVade considers the
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Intermediate Accounting II Acct. 551 E 13-1, 13-2, 13-8, 13-13, 13-19 13-1 A. Current B. Current C. Current D. Current E. Foot note Disclosure F. Current G. Current H. Current I. Current J. Current K. Current L. Current M. Current N. Current O. Foot note disclosure P. Current or Long-term 13-2 a. Sept. 1 Purchase 50,000 Account Payable 50,000 Oct. 1 Account Payable 50,000 Notes Payable 50,000 Oct. 1 Cash 75,000
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potential loss to the organization. Research was conducted based on the guidelines of the FASB to answer the client’s questions pertaining to the lawsuit. The memo provided to the client will answer the following questions: How are requirements for contingencies reported? What would happen to the financial statements if the client loses the lawsuit? Will the client’s debt be forgiven if the mortgage is refinanced or if their mortgage will be refinanced if they file Chapter 11? How will the treatment
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gain and loss contingencies, as well as standards for financial statements. This memo will provide relevant information concerning pending lawsuit effects for the use of clients and affected stakeholders. Reporting Requirements For Contingencies: Paragraph 450-20-25-1 sets forth the general rule on loss contingencies. The rule applies in the event a loss contingency is present, and the probability that an incident or event would occur to validate the loss, incurrence of liability, or damage of
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Should be reported as a contra liability. 2. Which of the following statements is correct? a. A company may exclude a short-term obligation from current liabilities if the firm intends to refinance the obligation on a long-term basis. b. A company may exclude a short-term obligation from current liabilities if the firm can demonstrate an ability to consummate a refinancing. c. A company may exclude a short-term obligation from current liabilities if it is paid off after the balance
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obligation, loss contingency, or an environmental obligation. APPLICABLE AUTHORITATIVE LITERATURE FASB Accounting Standards Codification (ASC) 410 Asset Retirement and Environmental Obligations FASB Accounting Standards Codification (ASC) 450 Contingencies DISCUSSION OF ALTERNATIVES The following section will address the alternative treatments accounting for both the remedial action and smoke filtration system under US GAAP. Recording both issues as a loss contingency will be discussed
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Passenger tickets net of discounts are recorded as current liabilities in the ‘sales in advance of carriage’ account until recognized as revenue. Yes, this would be handled similarly under U.S. GAAP. Amount 2013: 853 million euros 2012: 750 million euros Yes, transactions would be similar under U.S. GAAP. C2. Read the note for “provisions for liabilities and charges.” a. Do the beginning and ending balances of total liabilities and charges shown in the note for the fiscal year
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loss contingency, a liability is recognized when information available indicates that it is probable for a liability to occur and when the amount of loss can be reasonably estimated. Therefore, Norman should provide a provision for loss and recorded the transaction as a liability and an expense. The journal entries would be as follow: Dr. Cr. Lawsuit Loss Lawsuit Liability $250,000 $250,000 Lawsuit Loss will be recorded in Income Statement under Non-operating Expenses while Lawsuit Liability will
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FINANCIAL ACCOUNTING CASE 8-1 Norman Corporation (A) Case Analysis Group : 2 Members : Carbonell, Rosario Carpio, Nathaniel Zarate, Vic Paulo Date : October 21, 2013 I. Title of the case: Norman Corporation (A) II. Background of the Case Until 2010, Norman Corporation, a young manufacturer of specialty consumer products, had not had its financial statements audited. It had, however, relied on the auditing firm of Kline & Burrows to prepare its income tax returns
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------------------------------------------------- General Motors I. Background and Industry General Motors, along with its competitors, are part of the Automotive Manufacturer (Major) industry of the Consumer Goods economic sector. Companies in this industry make passenger cars and light trucks, as well as chassis for those vehicles. Demand is driven by employment and interest rates while the profitability of the individual company depends on manufacturing efficiency, product quality, and affective
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