intermediat accounting

LA21: 45 6 1 .9.:10 : 12 14 15 16 17 Below are independent transactions: 1. Seamus corporation sold 10,500 engines for $550 each during 2015. The engines are under warranty for one year following the sale. Maintenance on the engines during the warranty period average 845 each Actual warranty cost incurred during 2015 for units sold that year were $148,000 Instruction: Which amount at year end will be reported in the statement of financial position (balance sheet) as a related liability? (1 mark) 2- Tender corporation is involved in litigation regarding a faulty product sold in prior year, the mpany bas consulted with its attorney and determined that it is possible that they may lose the case. The attorneys estimated that there is 40% chance of losing. If this is the case, their attorney estimated that the amount of any payment would be $500,000 Instructions: - The litigation is classified as a contingent liability or a provision? Explain your answer. (1 mark) b- What is the required journal entry as a result of litigation? (1 mark) a. In September 2015, a worker was injured in the factory in an accident due in part to his own negligence. The worker sued his employer for $500,000. Lawyer believes it is reasonably possible that the outcome of the lawsuit will be unfavorable and that the settlement would cost the company between $ 200,000 and $400,000 b- Art is involved in a pending court case. Shen's council believe it is probable that Art will be granted damages of $2,000,000 Instructions Discuss the proper accounting treatment, including any required disclosures, for each situation. (each situationl mark)