a) Since August of 2010, Bowe-Whitney has been involved in labor disputes at two of its facilities. Negotiations between the company and the unions have not produced a settlement and, since January 2008, strikes have been ongoing at these facilities. It is virtually certain that material costs will be incurred but the amount of resultant costs cannot be adequately predicted. b) Bowe-Whitney is the defendant in a lawsuit filed in December 2010, in which Access Company seeks $10 million as an adjustment to the purchase price related to the sale of Bowe-Whitney's hardwood division in 2010. The lawsuit alleges that Bowe-Whitney misrepresented the division's assets and liabilities. Legal counsel advises that it is reasonably possible that Bowe-Whitney could lose $5 million, but that it's extremely unlikely it could lose the $10 million asked for. C).Giada Foods reported $940 million in income before income taxes for 2009, its first year of operations. Tax depreciation exceeded depreciation for financial reporting purposes by $100 million. The company also had non-tax-deductible expenses of $80 million relating to non-temporary differences. The income tax rate for 2009 was 35%, but the enacted rate for years after 2009 is 40%. The balance in the deferred tax liability in the December 31, 2009, balance sheet is d).For the current year ($ in millions), Centipede Corp. had $80 in pretax accounting income. This included bad debt expense of $6 based on the allowance method, and $20 in depreciation expense. Two million in receivables were written off as uncollectible, and MACRS depreciation amounted to $35. In the absence of other temporary or permanent differences, what was Centipede's income tax payable currently, assuming a tax rate of 40%? e)On January 1, 2009, M Company granted 90,000 stock options to certain executives. The options are exercisable no sooner than December 31, 2011 and expire on January 1, 2015. Each option can be exercised to acquire one share of $1 par common stock for $12. An option-pricing model estimates the fair value of the options to be $5 on the date of grant. What amount should M recognize as compensation expense for 2009? f).Stock options, rights, and warrants are different from convertible securities in that they: A. Typically increase cash upon exercise. B. Usually reduce total assets upon exercise. C. Often reduce liabilities upon exercise. D. Normally increase retained earnings upon exercise. h).When calculating diluted earnings per share, stock options: A. Are included if they are anti-dilutive. B. Should be ignored. C. Are included if they are dilutive. D. Increase the numerator while not affecting the denominator. i).Max Industries, a publicly traded company, changed its method of accounting for bad debts from the direct write-off method to the allowance method on January 1, 2011 because uncollectible accounts always have been material to the financial statements of the company. The company's accountant determined that an appropriate allowance of $9,000,000 should be established. Ignore income taxes. Required: i) Is this a change in accounting principle, change in estimate, or a correction of an error? (2 points) ii) Prepare the journal entry to record the change. (3 points) j).A reconciliation of pretax financial statement income to taxable income is shown below for Fieval Industries for the year ended December 31, 2009, its first year of operations. The income tax rate is 40%. pretax accounting income 300000 interest revenue on municipal securities(15000) warrant expense in excess of deductible amount 25000 depreciation in excess of financial statement amount(70000) taxable income from above240000 What amount(s) should Fieval report related to deferred income taxes in its 2009 balance sheet