1. For the year-end December 31, 2007, financial statement, what amount should M record as a liability? According to FASB 450-20-25-1, when a loss contingency exists, the likelihood that the future event or events will confirm the loss or impairment of an asset or the incurrence of a liability can range from probable to remote. An estimated loss from a loss contingency shall be accrued by a charge to income if both of the following conditions are met a. Information available before the financial statements are issued or are available to be issued indicates that it is probable that an asset had been impaired or a liability had been incurred at the date of the financial statement.
This paper will focus on consequential effects of ethical and unethical financial reporting, and the cascading affects on all supporting investors of Riverside Bottling Company. Background Riverside Bottling Company has secured a substantial insurance loan, which requires the general ledger to maintain at least a $200,000 monthly balance to avoid penalty charges as specified in the loan agreement (Weygandt, 2008, p. 382). For the month ending June 30 the balance of cash resulted in a $120,000 deficit. As the assistant controller, I report the discrepancy to the financial vice president, Gena Schmitt. Gena instructs that the cash receipts ledger to remain open for an additional day, as a $150,000 payment will post to the bank on July One from Oconto Distributors, and recorded as part of June’s receivables, which fulfills the requirements of the loan agreement, but misrepresents true closing receivables (Weygandt, 2008, p. 382).
Executive Summary Kenneth Jones, the president of Viscotech, has a handful of regulatory issues to resolve before moving any further with operations. Ideally, the company would have considered SEC regulations before raising the $976,000 in December 1997 from 34 investors through the MIFT pool. Most importantly, Viscotech was desperate for money, so they did not notify the SEC, and accepted money for securities offered under Regulation A, which had not been finalized by the SEC staff. Viscotech advertised the MIFT as a trust, when it appears to be a contract to buy securities at a future date, but we argue that the security vehicle is exempt under Regulation A (see Exhibit 1) for the following reasons. Under the Securities Act of 1933, the MIFT does not automatically fall into the category of exempt securities, so the company must still file a offering statement with the SEC to avoid penalties.
In deciding how to account for an unusual or unique transaction for financial reporting purposes, should one consider the tax treatment applied to the transaction? 3. Did Peat Marwick have a right to change its position on the proper accounting treatment for the stock redemptions? What factor or factors may have been responsible for Peat Marwick’s decision to change its position regarding these transactions? Facts In 1983, GEICO announced plans to purchase several million shares of its outstanding common stock for $60 per share.
Known in this case as Johnson Services which has accumulated significant losses. Issues: 1. Outstanding purchase of stock (a) Mr. Jones would like to know if he should purchase the stock of Smithton outright, leaving Smithton intact. He also wants to know if he issues debt in his Johnson Services to pay for the Smith Company would that raise debt to equity issues (b) Mr. Jones also wanted to know should he convert Smithton to an S Corporation and change the fiscal year to a calendar year. (c) Mr. Jones also asked what are the potential tax ramifications that exist for
What assumptions can you use to arrive approximately at the share price of $273,000 that was estimated by the dissenting shareholders? Show how these assumptions impact your valuation. 4. What is the maximum share price at which Herbert Kohler should be willing to settle with the dissenting shareholders in order to stop the trial on April 11, 2000? Assume that (i) if the trial proceeds it is expected to last less than a month and result in two possible outcomes in terms of the price per share established in court: the $273,000 claimed by the plaintiffs, or the $55,400 being defended by Herbert Kohler; (ii) Kohler estimates the probabilities of these outcomes at 30% and 70%, respectively.
But that affects his wife and family more than him, so 150 years in a federal prison will have to do as a direct punishment for him. Whether or not this is a fair punishment for the crime committed should not fall on the general public. It should be a carefully calculated equation involving the amount of time the ponzi scheme was ran, the total dollar amount taken from the victims (without deducting the payouts to the early investors),
One of the insurance that is required by law is Workers’ Compensation which is an insurance policy covering work-related injury and illness. Not a part of payroll or employment taxation, but required to be purchased by employers. There is high percentage of employer committing some kind of worker compensation insurance fraud. Insurance fraud is defined as an act that is committed to fraudulently receive payment from an insurer or deliberately lie to save money. A large number of insurance claims each year can be accredited to fraudulent claims, which cost insurers and other parties billions of dollars.
However, quick ratio indicates that the company relies on inventory to heavily and might experience liquidity problems in case of emergency. | 1982 | 1983 | 1984 | Leverage | | | | Assets/Equity | 2.2 | 2.4 | 2.7 | Debt/Total capital | 1.2 | 1.4 | 1.7 | Long-term debt/Capit. | 18.8% | 15.5% | 12.3% | | 1982 | 1983 | 1984 | Activity ratios | | | | Sales/assets | 2.8 | 2.7 | 2.9
Which Wall Street did not have in place or this would have never happen. Their virtues are money, how much they can get no matter what it costs others in the long run. Proof of this is the bail out that the taxpayers paid for. And that the government had to step in to or the economy would have been even worst. (Still think we are in a Depression not a rescission) Also the CEO of Enron for conspiracy and multiple counts of fraud is one example of dishonesty, fraud, disregarding one professional responsibility by given themselves Astronomical salaries and enormous benefits this reduces profits of the stockholders, who own the company.