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Unformatted text preview: actual financing prior to the issuance of the financial statements. Some large corporations obtain temporary financing by using commercial paper, often purchased by other companies as a short-term investment. As for Sprint Corporation, it seems as though they reported the debt as a current liability so they could be reported as non-current in order to be financed on a long-term basis. E13-12 1. No there was not a loss contingency because 3% of sales would actually be $150,000, which is considerably less than $37,500 on what was actually spent on warranty expenditures. 2. Cash / Accounts receivable $5,000,000 Sales revenue $4,962,500 Liability – warranty expenditure $37,500 Revenue calculated after warranty expenditure liability 3. Cupola should report the actual warranty expenditure amount of $37,500 for 2006, not what was estimated at the beginning of the year (3% of sales)....
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This note was uploaded on 09/08/2010 for the course ACCOUNTING 320 taught by Professor Hickman during the Spring '10 term at Heidelberg.
- Spring '10