Rotary Tools sells power tools and backs each product it sells with a one-year warranty against defects. Based on previous experience, the company expects warranty costs to be approximately 6% of sales. By the end of the first year, sales are $700,000. Actual warranty expenses incurred so far are $10,000. 1. Does this situation represent a contingent liability? Yes No 2. & 3. Record the appropriate journal entries for the warranties

suppose, due to favorable weather, the crop in 2012 is 330 tons. in percentage terms, how much bigger is the 2012 crop over the 2007-2011 average?

The treasurer for pittsburgh iron works wishes to use financial futures to hedge her interest rate exposure. she will sell five treasury futures contracts at $139,000 per contract. it is july and the contracts must be closed out in december of this year. long-term interest rates are currently 7.30 percent. if they increase to 9.50 percent, assume the value of the contracts will go down by 20 percent. also if interest rates do increase by 2.2 percent, assume the firm will have additional interest expense on its business loans and other commitments of $149,000. this expense, of course, will be separate from the futures contracts. a. what will be the profit or loss on the futures contract if interest rates increase to 9.50 percent by december when the contract is closed out

Why has the free enterprise system been modified to include some government intervention?