Question
In: Accounting
The following selected circumstances relate to pending lawsuits for Erismus, Inc. Erismus’s fiscal year ends on...
The following selected circumstances relate to pending lawsuits
for Erismus, Inc. Erismus’s fiscal year ends on December 31.
Financial statements are issued in March 2019. Erismus prepares its
financial statements according to U.S. GAAP.
Required:
Indicate the amount Erismus would record as an asset, liability, or
not accrued in the following circumstances.
1. Erismus is defending against a lawsuit.
Erismus's management believes the company has a slightly worse than
50/50 chance of eventually prevailing in court, and that if it
loses, the judgment will be $1,000,000.
2. Erismus is defending against a lawsuit.
Erismus's management believes it is probable that the company will
lose in court. If it loses, management believes that damages could
fall anywhere in the range of $2,000,000 to $4,000,000, with any
damage in that range equally likely.
3. Erismus is defending against a lawsuit.
Erismus's management believes it is probable that the company will
lose in court. If it loses, management believes that damages will
eventually be $5,000,000, with a present value of $3,500,000.
4. Erismus is a plaintiff in a lawsuit. Erismus's
management believes it is probable that the company eventually will
prevail in court, and that if it prevails, the judgment will be
$1,000,000.
5. Erismus is a plaintiff in a lawsuit. Erismus’s
management believes it is virtually certain that the company
eventually will prevail in court, and that if it prevails, the
judgment will be $500,000.
Solutions
ekkarill92 answered 2 years agoRelated Solutions
The following selected circumstances relate to pending lawsuits for Erismus, Inc. Erismus’s fiscal year ends on...
The following selected circumstances relate to pending lawsuits
for Erismus, Inc. Erismus’s fiscal year ends on December 31.
Financial statements are issued in March 2022. Erismus prepares its
financial statements according to U.S. GAAP.
Required:
Indicate the amount Erismus would record as an asset, a liability
or if no accrual would be necessary in the following
circumstances.
1. Erismus is defending against a lawsuit.
Erismus's management believes the company has a slightly worse than
50/50 chance of eventually prevailing...
The following selected circumstances relate to pending lawsuits for Erismus, Inc. Erismus’s fiscal year ends on...
The following selected circumstances relate to pending lawsuits
for Erismus, Inc. Erismus’s fiscal year ends on December 31.
Financial statements are issued in March 2019. Erismus prepares its
financial statements according to IFRS.
Required:
Indicate the amount Erismus would record as an
asset, liability, or not accrued in the following
circumstances.
1. Erismus is defending against a lawsuit.
Erismus's management believes the company has a slightly worse than
50/50 chance of eventually prevailing in court, and that if it...
The following selected circumstances relate to pending lawsuits for Erismus, Inc. Erismus’s fiscal year ends on...
The following selected circumstances relate to pending lawsuits
for Erismus, Inc. Erismus’s fiscal year ends on December 31.
Financial statements are issued in March 2019. Erismus prepares its
financial statements according to U.S. GAAP. Required: Indicate the
amount Erismus would record as an asset, liability, or not accrued
in the following circumstances. 1. Erismus is defending against a
lawsuit. Erismus's management believes the company has a slightly
worse than 50/50 chance of eventually prevailing in court, and that
if it...
the following selected circumstances related to pending lawsuits for Erismus, Inc. Erismus's fiscal year ends on...
the following selected circumstances related to
pending lawsuits for Erismus, Inc. Erismus's fiscal year ends on
December 31st. Financial statements are issued on March 2017.
Erismus prepares its financial statements according to us gaap.
indicate the amount of asset or liability that Erismus
would record and explain your answer.
1. Erismus is defending against a lawsuit. Erismus's
management believes the company has a slightly worse than 50-50
chance eventually prevailing in court and that if it loses the
judgement will...
The following selected transactions relate to liabilities of United Insulation Corporation. United’s fiscal year ends on...
The following selected
transactions relate to liabilities of United Insulation
Corporation. United’s fiscal year ends on December 31.
2021
Jan.
13
Negotiated a
revolving credit agreement with Parish Bank that can be renewed
annually upon bank approval. The amount available under the line of
credit is $20 million at the bank’s prime rate.
Feb.
1
Arranged a
three-month bank loan of $5 million with Parish Bank under the line
of credit agreement. Interest at the prime rate of 10% was...
The following selected transactions relate to liabilities of United Insulation Corporation. United’s fiscal year ends on...
The following selected transactions relate to liabilities of
United Insulation Corporation. United’s fiscal year ends on
December 31.
2021
Jan.
13
Negotiated a
revolving credit agreement with Parish Bank that can be renewed
annually upon bank approval. The amount available under the line of
credit is $24.0 million at the bank’s prime rate.
Feb.
1
Arranged a
three-month bank loan of $7.6 million with Parish Bank under the
line of credit agreement. Interest at the prime rate of 13% was...
The following selected transactions relate to liabilities of United Insulation Corporation. United’s fiscal year ends on...
The following selected transactions relate to liabilities of
United Insulation Corporation. United’s fiscal year ends on
December 31.
2021
Jan.
13
Negotiated a revolving credit agreement with Parish Bank that
can be renewed annually upon bank approval. The amount available
under the line of credit is $25.0 million at the bank’s prime
rate.
Feb.
1
Arranged a three-month bank loan of $2.0 million with Parish
Bank under the line of credit agreement. Interest at the prime rate
of 13% was...
The following selected transactions relate to liabilities of United Insulation Corporation. United’s fiscal year ends on...
The following selected transactions relate to liabilities of
United Insulation Corporation. United’s fiscal year ends on
December 31.
2018
Jan.
13
Negotiated a
revolving credit agreement with Parish Bank that can be renewed
annually upon bank approval. The amount available under the line of
credit is $20.0 million at the bank’s prime rate.
Feb.
1
Arranged a
three-month bank loan of $3.2 million with Parish Bank under the
line of credit agreement. Interest at the prime rate of 10% was...
The following selected transactions relate to liabilities of United Insulation Corporation. United’s fiscal year ends on...
The following selected transactions relate to liabilities of
United Insulation Corporation. United’s fiscal year ends on
December 31. 2018 Jan. 13 Negotiated a revolving credit agreement
with Parish Bank that can be renewed annually upon bank approval.
The amount available under the line of credit is $29.5 million at
the bank’s prime rate. Feb. 1 Arranged a three-month bank loan of
$7.2 million with Parish Bank under the line of credit agreement.
Interest at the prime rate of 7% was...
The Town of Quincy’s fiscal year ends on June 30. The following data relate to the...
The Town of Quincy’s fiscal year ends on June 30. The following
data relate to the property tax levy for the fiscal year ended June
30, 2017. The balance in Deferred Inflows—Property Taxes was
$68,000 at the end of the previous year. This was recognized as
revenue in the current year in a reversing journal entry. On July
1, 2016, property taxes in the amount of $8,650,000 were levied. It
was estimated that 0.5 percent would be uncollectible. The property...
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