Prepare a note disclosure relating to this incident

Assignment Help Financial Accounting

Reference no: EM131195559

Contingent liabilities

Several months ago, Ayers Industries Inc. experienced a hazardous materials spill at one of its plants. As a result, the Environmental Protection Agency (EPA) fined the company $240,000. The company is contesting the fine. In addition, an employee is seeking $220,000 in damages related to the spill. Lastly, a homeowner has sued the company for $310,000. The homeowner lives 35 miles from the plant but believes that the incident has reduced the home's resale value by $310,000.

Ayers' legal counsel believes that it is probable that the EPA fine will stand. In ad- dition, counsel indicates that an out-of-court settlement of $125,000 has recently been reached with the employee. The final papers will be signed next week. Counsel believes that the homeowner's case is much weaker and will be decided in favor of Ayers. Other litigation related to the spill is possible, but the damage amounts are uncertain.

a. Journalize the contingent liabilities associated with the hazardous materials spill. Use the account "Damage Awards and Fines" to recognize the expense for the period.

b. Prepare a note disclosure relating to this incident.

Reference no: EM131195559

Questions Cloud

What organization regulates industry where the ics is used : Identify what organization regulates the industry where this ICS is used. Explain two unique challenges that exist securing the PureLand Industrial Control System as compared to business systems.

Significantly impacted by supply and demand : Assignment: Choose a product (or group of products) that are significantly impacted by supply and demand. Imagine that you are the manager leading the team responsible for this product.

What is the principal mechanism for exchange adjustment : Discuss fixed and floating exchange rate systems. During what period in post-war international economic relations did each exist, respectively? Use the systemic and subsystemic levels-of-analysis to discuss the transition from one system to the other..

Appropriate influence in it consulting : Building of relationship skills and methods of appropriate influence in IT consulting?

Prepare a note disclosure relating to this incident : Journalize the contingent liabilities associated with the hazardous materials spill.- Prepare a note disclosure relating to this incident.

The labor market in the fast-food industry : The following graph shows the labor market in the fast-food industry in the fictional town of Supersize City. Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to this graph. Note: Onc..

Is randy car lost-abandoned or mislaid : Is Randy's car lost, abandoned, or mislaid? If Randy never returns to reclaim the car, who owns it?

Implement the enhancements to your survey class : Implement the enhancements to your Survey class according to the requirements presented above. The Survey class should have a method called "topRatedQuestion()," which performs an analysis of all responses for each question.

Fill the area representing producers surplus : Suppose the following graph shows the demand for, and supply of, apartments in New York City. Use the black point (plus symbol) to indicate the equilibrium monthly rent and quantity of apartments in the absence of price controls. Then use the green p..

User Account

All Pages