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117 what is the amount of the liability that the company recognizes in each of the f 4297615

 

117. What is the amount of the liability that the company recognizes in each of the following independent cases?

a.A cereal company issues coupons that can be exchanged for boxes of cereal. It issues 1 million coupons that promise the retailer who redeems the coupons $1 per coupon. The probability of redemption of any one coupon is 8%.

b.   A plaintiff files a lawsuit against the company. The probability is 80% that the company will lose. If it loses, the amount of the loss will most likely be $100,000. 

118. Classifying financial statement accounts. The balance sheet or income statement classifies various items in one of the following ways:

CA—Current assets
NA—Noncurrent assets
CL—Current liabilities
NL—Noncurrent liabilities
CC—Contributed capital
RE—Retained earnings
NI—Income statement item (revenue or expense)
X—Item generally does not appear on a balance sheet or an income statement

Using the abbreviations in the previous list, indicate the classification of each of the following items under U.S. GAAP and IFRS. If the classifications differ between U.S. GAAP and IFRS, indicate what that difference would be.
 

 

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