Need Help Writing an Essay?
Tell us about your assignment and we will find the best writer for your project
Get Help Now!E13-13B (Contingencies) Presented below are three independent situations. Answer the question at the end of each situation.
1. During 2014, Santiago Inc. became involved in a tax dispute with the IRS. Santiago’s attorneys have indicated that they believe it is probable that Santiago will lose this dispute. They also believe that Santiago will have to pay the IRS between $225,000 and $350,000. After the 2014 financial statements were issued, the case was settled with the IRS for $300,000. What amount, if any, should be reported as a liability for this contingency as of December 31, 2014?
2. On October 1, 2014, Washington Chemical was identified as a potentially responsible party by the Environmental Protection Agency. Washington Chemical’s management and its counsel have concluded that it is probable that Washington will be responsible for damages, and a reasonable estimate of these damages is $1,250,000. Washington Chemical’s insurance policy of $2,250,000 has a deductible clause of $125,000. How should Washington Chemical report this information in its financial statements at December 31, 2014?
3. Sandberg Inc. had a manufacturing plant in Bosnia, which was destroyed in the civil war there. It is not certain who will compensate Sandberg for this destruction, but Sandberg has been assured by governmental officials that it will receive a definite amount for this plant. The amount of the compensation will be less than the fair value of the plant, but more than its book value. How should the contingency be reported in the financial statements of Sandberg Inc.?
The post E13-13b (contingencies) presented below are three independent appeared first on EssayBishop.
Papershost.com is your go-to destination for swift and trustworthy essay writing assistance. Our comprehensive writing services encompass essays, coursework, research papers, and more, ensuring a seamless solution for all your academic needs. Entrust your writing assignments to our skilled writers and bid farewell to concerns and stress. Rest assured, your college papers are secure in our capable hands, promising a hassle-free and reliable experience.
Do not let academic stress weigh you down. PapersHost.com is here to empower you with exceptional essay and assignment writing services. Place your order today and experience the difference of working with a dedicated team committed to your academic success.