To rluxmi

Please work on these problems/break them down for me. I will write the footnote. - Thank you. 1) Related Party Transaction: Dana Schlumpf, CEO of Delecta, Inc., is on the Board of Directors of Loha Bakery, Inc. Delecta provided $1,000,000 of debt financing for Loha Bakery with a rate of 6% per year. All interest and the principal are due to Delecta upon the expiration of the loan term 10 years from now. Further Loha Bakery has been engaged by Delecta to be the sole supplier of muffins to Delecta stores. In exchange for this exclusive franchise, Loha Bakery pays Delecta an annual fee of $50,000. Loha Bakery charges $1.25 per muffin and anticipates sales of 4,000,000 muffins per year to Delecta for a period of 10 years. Instructions: Please provide a related party footnote for Delecta's financial statements to properly disclose the relationship described above. 2) Commitments: Boston WEB, LLC has engaged in a contract with Insource, LLP to provide 500,000 pounds of titanium annually for 5 years. The price of the mineral is $15 per pound in the first year and increases by $1 per pound in each successive year of the agreement. The contract was established to provide a hedge against the huge increases in the price of titanium. It is a \"take-orpay\" contract. In addition, Boston WEB has engaged the development services of Green's Global GUIs for a retainer of $125,000 per year for 5 years. Any development that results in a viable product will trigger an additional royalty to Green's Global of 25% of the gross profit of the resultant product. At present, there have been no viable products result from the Green's Global research. Obligations for such royalties are not predicted for the foreseeable future. Instructions: Please provide a commitments footnote for Boston WEB financial statements to properly disclose each situation described above. 3) Contingencies: Red Boxer Service, Inc has recently been sued by a person who was bitten by a dog under the care of Red Boxer. Red Boxer's attorneys believe it probable that the plaintiff will prevail in court and the loss is likely to be in the neighborhood of $50,000. Red Boxer has total assets of $500,000,000 and revenues of $100,000,000. It is also insured for the sort of loss represented by the suit with no deductible. Red Boxer has also been accused by the EPA of polluting a nearby stream in which the dogs play. Attorneys advise that it is reasonably possible that the EPA suit results in a loss. However, it is not possible to determine a likely amount of uninsured loss. Finally, Red Boxer has taken a questionable tax position that, if successfully defended in tax court, could result in a refund of $25,000,000. It appears likely that Red Boxer will prevail in tax court. Instructions: Please provide a contingencies footnote for Red Boxer financial statements to properly disclose each situation described above