Your company has just been names in as a defendant in a lawsuit because of an accident. The plaintiff is suing for $400,000 in damages. You have contacted legal counsel and the attorneys have advised your company that the loss could range from $50,000 to $350,000 and no amount in the range is more likely than any other amount in the range. The attorney said the lawsuit will not come up in court until next year about April. Prepare a brief accounting memo and an email to the CEO using the FASB codification as guidance to answer the following: 1. In general, how does a company account for these kind of losses? 2. Explain whether a loss should be accrued and if so for what amount. 3. Any disclosures that are required.

Shi Company is going through a Chapter 7 bankruptcy. All assets have been liquidated, and the company retains only $26,600 in free cash. The following debts, totaling $45,050, remain: Government claims to unpaid taxes Salary during last month owed to Mr. Key (not an officer) Administrative expenses Salary during last month owed to Ms. Rankin (not an officer) Unsecured accounts payable $ 7,400 19,225 3,850 Indicate how much money will be paid to the creditor associated with each debt. Types of Debts Administrative expenses Salary during last month owed to Mr. Key and Ms. Rankin 6,625 7,950 Answer is complete but not entirely correct. Amounts 3,850 $12.850 $ 3,716 $26,600 Government claims to unpaid taxes

“Louis's firm had the following situations during the year:   Louis's CEO purchased a Ferrari for personal use and charged it to the company.   Louis added five additional weeks to its fiscal year so it could improve its income. The accounting period for the previous years were 52 weeks.   Equipment with a cost of £100,000 is reported at its market value of £150,000.   Recently, Louis purchased a beach house for his personal use. However, he plans on using it for company retreats and for hosting large clients. Hence, he decided to list the asset and the corresponding liability for this reason (he used a loan to purchase this asset).   Louis included £10,000 in accounts receivable and retained earnings for a service that he will provide next year. Since he is an honest man and will provide the service, he decided to record the amount this year.   The company had paid £3,000 for insurance but uses only £2,000 during the period. The accountant has recorded £3,000 as insurance…

Newtake Records Ltd owns three shops selling rare jazz and classical recordings to serious collectors. At the beginning of June, the business had an overdraft of £35,000 and the bank has asked for this to be eliminated by the end of November of the same year. As a result, the directors of the business have recently decided to review their plans for the next six months in order to comply with this requirement.The following forecast information was prepared for the business some months earlier:   May June July August September October November   £000 £000 £000 £000 £000 £000 £000 Expected Sales 180 230 320 250 140 120 110 Purchases 135 180 142 94 75 66 57 Admin. expenses 52 55 56 53 48 46 45 Selling expenses 22 24 28 26 21 19 18 Tax payment       22       Finance payments 5 5 5 5 5 5 5 Shop refurbishment   - - 14 18 6 - -…