HADM_121_Chapter9_Final 1

HADM_121_Chapter9_Final 1 - The liability is both probably...

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[Type the document title] October 22, 2007 E9-2 E9-4 4. The management should work out a contract that would allow a longer payment period but a reoccurring borrowing system with the same bank. That way the company can have more time to pay off the debt, and the bank can have a surefire customer every Christmas season. E9-8
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[Type the document title] October 22, 2007 This is an obligation that should be report on the balance sheet. It should be reported on the balance sheet because the rent is an asset and the company is paying cash every year for the asset. The amount should be pt under Rent Expense for 2.4 million per year. They would decrease the rent asset account and put the output in “rent expense”. P9-6 1. Because the liability is contingent liability and it is reasonably assumed that those liabilities will bear fruit, the 2 million for 2006 must be recorded and reported on the balance sheet.
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Unformatted text preview: The liability is both probably and capable of being reasonably estimated. 2. 2 million dollars will be left as a liability under unearned revenue and will be adjusted when the company delivers the last 2 million $ in magazine subscriptions. 3. The company should put a note in their final investor report, citing that there is probable cause of a 44.4 million $ expense, but they have appealed the decision. . 4. 4247677/5303222 = .80096. Companies should have a ratio between 1.0 and 2.0. This particular company has a ratio slightly below the average meaning it does not have a lot of liquidity. 5. Alcoa will record the environmental expenditure as a liability when they have to either by special interest groups or government groups. Alcoa affects the environment greatly; therefore, they want to limit how much they report in public documents....
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