Problem on deductible clause

Reference no: EM13154310

On October 1, 2010, Holmgren Chemical was identified as a potentially responsible party by the Environmental Protection Agency. Holmgren's management along with its counsel have concluded that it is probable that Holmgren will be responsible for damages, and a reasonable estimate of these damages is $6,000,000. Holmgren's insurance policy of $9,000,000 has a deductible clause of $500,000. How should Holmgren Chemical report this information in its financial statements at December 31, 2010?

Reference no: EM13154310

Questions Cloud

Correctly labelled demand and supply diagram : What is the negative consumption externality described in this quote? Show this externality on a correctly labelled demand and supply diagram for the petrol market.

What is the npv of project? assume a 10% annual discount : A 20-year project produces annual cash flows of $12,000 from year 1 to year 20. If the payback period is exactly 12 years, what is the NPV of this project? Assume a 10% annual discount rate.

Probability that student is a management major : A survey of 34 students at the Wall College of Business showed the following majors: What is the probability he or she is a management major?

A brand name has a 60% recognition rate : A brand name has a 60% recognition rate. Assume the owner of the brand wants to verify that rate by beginning with a small sample of 6 randomly selected consumers.

Problem on deductible clause : Holmgren's insurance policy of $9,000,000 has a deductible clause of $500,000. How should Holmgren Chemical report this information in its financial statements at December 31, 2010?

What is yield : A $100 000 7.5% bond with 7years to maturity is sold for $93 250. What is its yield, if interest is paid 6-monthly?

What is the resulting level of output : What is the -maximing combination of labor and capital the firm should use? What is the resulting level of output? What is the economic profit? Is this the least costly way of of producing the profit-maximizing output?

Compute relative dispersion of group of overseas passengers : For a large group of overseas passengers, the mean is 78 pounds and the standard deviation is 15 pounds. compute the relative dispersion of each group.

What happens to the value of m1 and to m2 : Suppose Uncle Nacho sells shares of Time Warner stock for $20,000 and puts the proceeds from the sale into his money market mutual fund account. What happens to the value of M1 and to M2?

User Account

All Pages