Determine which of the following transactions represent contingent liabilities for Hermani Rental and indicate the proper accountingtreatment at the company’s fiscal year-end.   Contingent liability? Accounting Treatment 1. Hermani Rental cosigned a loan for $75,000 due in one year for Wyler Company. Answer Answer Wyler is a very profitable company and is very liquid, making it a remote chance     Hermani will have to pay the loan.     2. One of Hermani’s rental tents collapsed at a wedding and injured the bride and groom. Answer Answer Hermani’s legal counsel believes it is probable that Hermani will have to pay damages     of $400,000.     3. Hermani Rental is being audited by the Internal Revenue Service. Its tax returns for Answer Answer the past two years are being examined. At the company’s year-end, the audit is still in     process. Hermani’s CPA believes that payment of significant taxes is possible.

At year-end, the president instructs you, the financial officer, not to record accrued expenses until next year because they will not be paid until then. The president also directs you to record in current-year sales a recent purchase order from a customer that requires merchandise to be delivered two weeks after the year-end. Your company would report a net income instead of a net loss if you follow these instructions. What do you do?

A large account receivable from Taylor Industries was considered fully collectible at September 30, Year 5, the balance sheet date. Taylor suffered a plant explosion on October 25, Year 5. Because Taylor was uninsured, it is unlikely that the account will be paid. How should this event be presented in the entity's financial statements? Adjustment of the financial statements for the year ended September 30, Year 5. No financial statement disclosure. Disclosure in a note to the financial statements. Disclosure by means of supplemental, pro forma financial data.

36. Akito Company uses the statement of financial position approach in estimating uncollectible accounts expense. The entity prepares an adjusting entry to recognize this expense at the end of the year. During the year, the entity wrote off a P100, 000 receivable and made no recovery of previous write-off. After the adjusting entry for the year, the credit balance in the allowance for doubtful accounts was P250, 000 larger than it was on January 1. What amount of uncollectible account expense was recorded for the year?

Cedar Valley is a national restoration contractor licensed in roofing, siding, gutters and windows. Cedar Valley's balance of Allowance for Uncollectible Accounts is $2,300 (debit before adjustment at the end of the year. The company estimates future uncollectible accounts to be $11,500. What is the adjustment Cedar Valley would record for Allowance for Uncollectible Accounts? (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.) View transaction list Journal entry worksheet 1 Record the adjusting entry for Allowance for Uncollectible Accounts. Note: Enter debits before credits. Transaction General Jounal Debit Credit Record entry Clear entry View general journal

The Assistant Manager of Ridley Corporation is seeking your advice as the accountant, indealing with the accounting changes in the company for the year 2020. Prepare a report,indicating the appropriate accounting treatment for the following situations. In yourreport, indicate the type of accounting change (change in accounting policy or change inestimate) or correction of error and the appropriate accounting treatment (retrospective orprospective). 1. It was found in May 2020 that warranty claims for 2019 sales have increased because of adefective component used in manufacturing. The extra costs amounted to $200,000 inexcess of the 2019 warranty accrual.  2. In 2020, the company examined its entire policy relating to the depreciation of plantequipment. Plant equipment had normally been depreciated over a 15-year period, butrecent experience has indicated that the company was using too short a period in itsestimates and that the assets should be depreciated over a 20-year period.  3.…

At the end of the current year, using the aging of receivable method, management estimated that $15,750 of the accounts receivable balance would be uncollectible. Prior to any year-end adjustments, the Allowance for Doubtful Accounts had a debit balance of $375. What adjusting entry should the company make at the end of the current year to record its estimated bad debts expense?

On December 31, 2020, Extreme Fitness has adjusted balances of $820,000 in Accounts Receivable and $59,000 in Allowance for Doubtful Accounts. On January 2, 2021, the company learns that certain customer accounts are not collectible, so management authorizes a write-off of these accounts totaling $12,000. Required: Assume that on February 2, 2021, Extreme Fitness received a payment of $700 from one of the customers whose balance had been written off. Prepare the journal entries to record this transaction. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) View transaction list Journal entry worksheet 2 Record the reversal of a customer account previously written off in the amount of $700. Note: Enter debits before credits. Transaction 1 General Journal Accounts Receivable Allowance for Doubtful Accounts Debit Credit

The directors of Rainy-day Ltd wish to change their invoicing process so that customers are only issued with an invoice where there is a legal requirement to do so. For the quarters ended 31 December 2019, 31 March 2020 and 30 September 2020 Rainy-day Ltd was late in submitting its VAT returns and in paying the related VAT liabilities. All of Rainy-day Ltd's other VAT returns have been submitted on time. required: Calculate the surcharge penalty that Rainy-day Ltd could be charged if it is late in submitting its VAT return and paying its VAT liability for the quarter ended 31 March 2021. Total VAT payaole on 25 March 2021 was £ 44,529.33