п»їCOMMERCE 450 TASK 1
SHOW UP 2013 BECAUSE OF: September 25
All questions should be answered for the nearest full dollar only that earnings every share questions are to be answered to the nearby cent. You should assume, until it is stated in any other case, that all companies are Canadian open public companies which must conform to the Worldwide Financial Confirming Standards which all companies have December 31 year-ends.
Question you (16 marks)
a) Manaus Manufacturing supplies warranties with the products which it sells. At December 31, 2012, the company's warranty dotacion amounted to $420, 000. During the 2013, sales of products to which guarantees were provided amounted to $12 , 000, 000. The company believed that warranty costs will amount to 3% of the product sales amount. In the past year, the company spent $510, 000 on warranty costs.
i) What amount must be recorded because warranty expenditure for 2013 by the company? ii) What warranty provision should be included in the company's statement of financial situation as by December 31, 2013?
b) Kleinberg Corporation was sued by a consumer for product liability. The consumer sought damages of $1, 500, 000. At the their December 31, 2012, year-end, the company obtained an opinion using their lawyers the fact that customer a new 75% probability of winning the suit together with the damages probably assessed in the range of $800, 000 to $1, two hundred, 000. Legal costs had been estimated to amount to a further $150, 1000. In late January, before the industry’s financial claims had been finished, the company completed the claim with the customer intended for $800, 500. The attorneys estimated their particular fees being reduced to $80, 000 because the subject was resolved without going to court.
What provision(s) ought to Kleinberg Firm make for this matter in its statement of financial position as at December 31, 2012?
c) Chihuahua Chemicals has, for the last decade, self-insured against injury and casualty losses...