During 2010 maverick inc became involved in a tax dispute

Assignment Help Accounting Basics

Reference no: EM13597028

During 2010, Maverick Inc. became involved in a tax dispute with the IRS. Maverick's attorneys have indicated that they believe it is probable that Maverick will lose this dispute. They also believe that Maverick will have to pay the IRS between $800,000 and $1,400,000. After the 2010 financial statements were issued, the case was settled with the IRS for $1,200,000. What amount, if any, should be reported as a liability for this contingency as of December 31, 2010?

On October 1, 2010, Holmgren Chemical was identified as a potentially responsible party by the Environmental Protection Agency. Holmgren's management along with its counsel have concluded that it is probable that Holmgren will be responsible for damages, and a reasonable estimate of these damages is $6,000,000. Holmgren's insurance policy of $9,000,000 has a deductible clause of $500,000. How should Holmgren Chemical report this information in its financial statements at December 31, 2010?

Shinobi Inc. had a manufacturing plant in Darfur, which was destroyed in the civil war. It is not certain who will compensate Shinobi for this destruction, but Shinobi 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 Shinobi Inc.?

Reference no: EM13597028

Questions Cloud

The amount for landscaping includes 800 for maintaining the : the brocks business westchester wood has the following income and expenses 1 assume westchester wood is a business... a

Compute the net income for the current year assuming that : presented below are changes in all the account balances of jackson furniture co. during the current year except for

For the past several years emily page has operated a : for the past several years emily page has operated a part-time consulting business from her home. as of june 1 2010

Wendy is evaluating a capital budgeting project that should : wendy is evaluating a capital budgeting project that should last for 4yrs.the project requires 800000.00 of

During 2010 maverick inc became involved in a tax dispute : during 2010 maverick inc. became involved in a tax dispute with the irs. mavericks attorneys have indicated that they

She agrees to lend you the 1000 but she wants you to pay : you want to borrow 1000 from a friend for one year and you propose to pay her 1120 at the end of the year. she agrees

The bonds have a 4 percent coupon rate payable semiannually : in order to accurately assess the capital structure of a firm it is necessary to convert its balance sheet figures to a

Due to a number of lawsuits related to toxic wastes a major : due to a number of lawsuits related to toxic wastes a major chemical manufacturer has recently experienced a market

The machine being used for the operation has both a book : the chen company is considering the purchase of a new machine to replace an obsolete one. the machine being used for

User Account

All Pages