HW#4 solution - Homework #4 Solution Question 1 a....

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Question 1 a. Estimated Loss on Purchase Commitment 10,000 Estimated Liability on Purchase Commitment 10,000 b. Inventory 116,000 Loss on purchase commitment 4,000 Estimated Liability on Purchase Commitment 10,000 Cash 130,000 Question 2 a. Estimated Loss 400,000 Estimated Liability 400,000 b. No journal entry (gain contingency) c. Cheater 2011 Net Income – Decrease by $80,000 Nice 2011 Net Income – Increase by $480,000 Question 3 Part 1. a.No journal entry – disclose in notes b.Cash 8,000,000 Notes Payable 8,000,000 c.Cash 3,000 Liability – Refundable Deposits 3,000 d.A/R (or cash) 5,150,000 Sales 5,000,000 Sales Tax Payable 150,000 e.Interest Expense 200,000 Interest Payable 200,000 2. Current Liabilities Notes Payable $8,000,000 Sales Tax Payable 150,000 Liability – Refundable Deposits 3,000 Interest Payable 200,000 Total Current Liabilities $8,353,000 Part 3. f.
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This note was uploaded on 01/20/2012 for the course ECON 380 taught by Professor Joyce during the Spring '11 term at University of Ottawa.

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HW#4 solution - Homework #4 Solution Question 1 a....

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