Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Van Rushing Hunting Goods' fiscal year ends onDecember 31. At the end of the 2021 fiscal year, the company had notes payable of $4.2 million

image text in transcribed
Van Rushing Hunting Goods' fiscal year ends onDecember 31. At the end of the 2021 fiscal year, the company had notes payable of $4.2 million due on February 8,2022 . Rushing sold 3.0 million shares of its $0.25 par, common stock on February 3,2022 , for $3.0 million. The proceeds from that sale along with $1.2 million from the maturation of some 3 -month CDs were used to pay the notes payable on February 8. Through his attorney, one of Rushing's construction workers notified management on January 5, 2022, that he planned to sue the company for $1 million related to a work-site injury on December 20, 2021. As of December 31,2021 , management had been unaware of the injury, but reached an agreement on February 23, 2022, to settle the matter by paying the employee's medical bills of $70,500. Rushing's financial statements were finalized on March 3, 2022. Required: 1. What amount(s) if any, related to the situations described should Rushing report among current liabilities in its balance sheet at December 31,2021 ? 2. What amount(s) if any, related to the situations described should Rushing report among long-term liabilities in its balance sheet at December 31, 2021? 3. Assume that, as of March 3, management does not think it is probable that it will suffer a material loss because of the injury. What amount(s) if any, related to the situations described should Rushing report among current liabilities and long-term liabilities in its balance sheet at December 31,2021 if the settlement agreement had occurred on March 15, 2022, instead? 4. What amount(s) if any, related to the situations described should Rushing report among current liabilities and long-term liabilities in Its balance sheet at December 31,2021 if the work-site injury had occurred on January 3,2022 , instead? (For all requirements, enter your answers in whole dollars.)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

More Books

Students also viewed these Accounting questions