Business, 12.03.2021 15:20 pmdm95

The following independent situations represent various types of liabilities. Analyze each situation and indicate which of the following is the proper accounting treatment for each company: a. record in accounts
b. disclose in a financial statement footnote
c. neither record nor disclose.

1. A stockholder has filed a lawsuit against Clinch Corporation. Clinch's attorney's have reviewed the facts of the case. Their review revealed similar lawsuits have never resulted in a cash award and it is highly unlikely that this lawsuit will either.
2. Foster signed a 60-day, 10% note when it purchased items from another company.
3. The EPA notifies Shevlin Co that a state where it has a plant is filing a lawsuit for groundwater pollution against Shevlin and another company that has a plant adjacent to Shevlin's plant. Test results have not identified the exact source of the polution. Shevlin's manufacturing process often produces by-products that can pollute groundwater.
4. Sloan Company manufactured and sold products to a retailer that later sold the products to consumers. The Sloan Company will replace the product if it is found to be defective within 90 days of the sale to the consumer. Historically, 1.2% of the products are returned for replacement

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The following independent situations represent various types of liabilities. Analyze each situation...

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