Possibilities for recording liability
Course:- Cost Accounting
Reference No.:- EM13298393

Assignment Help
Assignment Help >> Cost Accounting

I have a liability that was created by the exercise of a put option on a warrant. The warrant had a strike price of $0.001 and the put has a value of $2.7M. The put option first was available in April 2007 and was exercised in April 2009. In recording the liability, I categorized it as an expense.

Although the liability and corresponding expense should have been accrued since April 2007, it was not recognized until April 2009. My question is, was it proper to record the liability as an expense when the entry was made?

Are there any other possibilities for recording this liability?

Put your comment

Ask Question & Get Answers from Experts
Browse some more (Cost Accounting) Materials
The company pays for one-half of its purchases in the month of purchase and the remainder in the following month. End-of-month inventory must be 50 percent of the budgeted sal
If a budgeted activity base is used as the base in cost allocation, each department's cost allocation will be predictable, and not influenced by the: A. Actual total cost. B
Develop a template of costs. You should separate expenses into variable and fixed expenses. The SMH data file contains a template to provide some guidance and calculate the
The federal income tax withholding rate is 30%. Compute the January salaries and commissions expense, and make any necessary entries to record the payroll transactions inclu
On July 1, 2013, Walter Allen Inc. purchased 6,000 shares of the outstanding common stock of Piaffe Corporation at a cost of $140,000. Piaffe had 30,000 shares of outstandin
Create a table that computes the total cost and marginal cost for every quantity between 1 and 10 units and what is the relation between marginal cost and average cost
Prepare a variable costing income statement with two columns - one should show the results if 25,000 units are produced, and the second column should show the results if 35,
Jane Erickson, manager of an electronics division, was not pleased with the results that had recently been reported concerning the division's activity-based management imple