293Assign.4.09 - Commerce 293 Assignment #4 Current...

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Commerce 293 Assignment #4 Current Liabilities, Problem One The seven events listed below occurred at Humber Co. during the year ended December 31, 2010: 1. On March 8, the company was named as a defendant in a lawsuit alleging $5 million in damages caused by their product igniting when near an open flame. Humber’s lawyers believe they may be able to settle the lawsuit for $250,000, but if they end up going to court it could cost Humber between $2million and $4million. The suit is not expected to be settled for several years. 2. On August 1, Humber borrowed $1,200,000 from Monarch Bank, signing a six- month, 4 percent note payable. Interest is payable at maturity. No journal entries have been recorded after August 1, 2010. 3. On December 1, the company purchased machinery at a price of $200,000 and signed a note payable due in six months with interest stated at the annual rate of 4.5 percent. 4.
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This note was uploaded on 10/18/2011 for the course COMM 293 taught by Professor Jackes during the Spring '08 term at The University of British Columbia.

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293Assign.4.09 - Commerce 293 Assignment #4 Current...

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