Business, 28.01.2020 05:31 anabelhosva

Coronado industries is being sued for illness caused to local residents as a result of negligence on the company's part in permitting the local residents to be exposed to highly toxic chemicals from its plant. coronado's lawyer states that it is probable that coronado will lose the suit and be found liable for a judgment costing coronado anywhere from $1,830,000 to $8,980,000. however, the lawyer states that the most probable cost is $5,430,000. as a result of the above facts, coronado should accrue:
a) a loss contingency of $1,800,000 and disclose an additional contingency of up to $7,200,000.b) a loss contingency of $5,400,000 and disclose an additional contingency of up to $3,600,000.c) a loss contingency of $5,400,000 but not disclose any additional contingency. d) no loss contingency but disclose a contingency of $1,800,000 to $9,000,000.

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Answer from: jwbri

b) a loss contingency of $5,400,000 and disclose an additional contingency of up to $3,600,000.

Explanation:

There are 2 conditions that must be met in making provisions, as stated by the International Accounting Standards (IAS 37). They are:

1. Present Obligation

2. Are outflows probable (i.e. more likely than not)

3. Can the outflows be reliably measured.

1. Present Obligation

In the given scenario, it was mentioned that there is a present obligation because ''Coronado Industries is being sued for illness caused to local residents as a result of negligence on the company's part'' hence this already informs that there is an obligation.

2. Are outflows probable (i.e. more likely than not)

From the scenario, it can be gathered that outflows are probable because the lawyer has stated ''it is probable that Coronado will lose the suit and be found liable'' that implies that there is a liability to be recognised

3. Can the outflows be reliably measured.

It is stated in the scenario that ''However, the lawyer states that the most probable cost is $5,430,000'' Hence, this represents a reliable estimate.

Furthermore, the other likely fraction in the worse case scenario should be shown in the disclosures or additional information.

Answer from: Quest

$527.7.if the following was the question $527.7 is the answer.students who are trying to raise funds have an agreement with a local pizza chain. the chain has agreed to sell them pizzas at a discount, which the students can then resell to families in the local community for a profit. it is expected that of the 500 families in the community, at most 70% will buy pizza. based on a survey of their personal preferences, the students believe that they should order no more than 120 cheese pizzas, no more than 150 pepperoni pizzas, and no more than 100 vegetarian pizzas. they also want to make sure that at least 20% of the total pizzas are cheese and at least 50% of the pizzas are pepperoni. they make a profit of $1.45, $1.75, and $1.98, respectively, for each cheese, pepperoni, and vegetarian pizza they resell. how many pizzas of each type should they buy?

Answer from: Quest

answerchemical property;

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