Gomez corporation a manufacturer of household paints, is preparing annual financial statements at December 31, 2020. Because of a recently proven health hazard in one of its paints, the government has clearly indicated its intention of having Concord recall all cans of this paint sold in the last six months. The management of Concord estimates that this recall would cost $793000.

a. What accounting recognition, if any, should be accorded this situation?
b. How would your answer change to part a if 70% of the paint cans were sold before 12/31/2011 and the remainder were sold after 12/31/2011 but before the financial statements were issued on 3/5/2012.
c. How would your answer change to part a if the health hazard was only alleged (but not yet probable) when the 2011 financial statements were published.

Management discovers that a supervisor at one of its restaurant locations removes excess cash and resets sales totals throughout the day on the point-of-sale (pos) system. at closing, the supervisor deposits cash equal to the recorded sales on the pos system and keeps the rest.the supervisor forwards the close-of-day pos reports from the pos system along with a copy of the bank deposit slip to the company’s revenue accounting department. the revenue accounting department records the sales and the cash for the location in the general ledger and verifies the deposit slip to the bank statement. any differences between sales and deposits are recorded in an over/short account and, if necessary, followed up with the location supervisor. the customer food order checks are serially numbered, and it is the supervisor’s responsibility to see that they are accounted for at the end of each day. customerchecks and the transaction journal tapes from the pos system are kept by the supervisor for 1 week at the location and then destroyed.what control allowed the fraud to occur?

Advanced enterprises reports year-end information from 2018 as follows: sales (160,250 units) $968,000 cost of goods sold 641,000 gross margin 327,000 operating expenses 263,000 operating income $64,000 advanced is developing the 2019 budget. in 2019 the company would like to increase selling prices by 14.5%, and as a result expects a decrease in sales volume of 9%. all other operating expenses are expected to remain constant. assume that cost of goods sold is a variable cost and that operating expenses are a fixed cost. should advanced increase the selling price in 2019?

Penelope summers received certain income benefits in 2018. she received $1,400 of state unemployment insurance benefits, $2,000 from a federal unemployment trust fund and $3,700 workers’ compensation received for an occupational injury. what amount of the compensation must penelope include in her income