Specialty Producers is involved in two product liability lawsuits and a third lawsuit that the company brought against a competitor for patent infringement. At December 31, 20X1, the company's attorney informed management of the following: 1. It is probable that Specialty will lose one of the product liability lawsuits, although the actual settlement could be as low as $800,000 or as high as $2,000,000, with no one estimate more likely than the other within this range. 2. It is possible that the company could lose $1,000,000 in the second product liability lawsuit. 3. It is probable that Specialty will win $500,000 in the patent infringement case. What should Specialty report on its December 31, 20X1 balance sheet for these contingent liabilities

Financial information that is capable of making a difference in a decision is

Pennewell publishing inc. (pp) is a zero growth company. it currently has zero debt and its earnings before interest and taxes (ebit) are $80,000. pp's current cost of equity is 10%, and its tax rate is 40%. the firm has 10,000 shares of common stock outstanding selling at a price per share of $48.00. refer to the data for pennewell publishing inc. (pp). pp is considering changing its capital structure to one with 30% debt and 70% equity, based on market values. the debt would have an interest rate of 8%. the new funds would be used to repurchase stock. it is estimated that the increase in risk resulting from the added leverage would cause the required rate of return on equity to rise to 12%. if this plan were carried out, what would be pp's new value of operations? a. $484,359 b. $521,173 c. $584,653 d. $560,748 e. $487,805

On january 1, year 1, purl corp. purchased as a long-term investment $500,000 face amount of shaw, inc.’s 8% bonds for $456,200. the bonds were purchased to yield 10% interest. the bonds mature on january 1, year 6, and pay interest annually on january 1. purl uses the effective interest method of amortization. what amount (rounded to nearest $100) should purl report on its december 31, year 2, balance sheet for these held-to-maturity bonds?