All Related Questions of Product Liability

Q: Shank and Verst, attorneys-at-law, provided legal

Shank and Verst, attorneys-at-law, provided legal representation to Baldwin Equipment, Inc., in a product liability suit. Twenty partner hours and 65 associate hours were worked in defending the compa...

Q: Officers of Richnow Company do not wish to disclose information about a

Officers of Richnow Company do not wish to disclose information about a product liability lawsuit filed by a customer seeking $500,000 in damages. They believe the suit is frivolous and without merit....

Q: Pitts Company has experienced significant financial difficulty. Current liabilities exceed current

Pitts Company has experienced significant financial difficulty. Current liabilities exceed current assets by $1 million, cash has decreased to $10,000, the interest on the long-term debt has not been...

Q: Assume that the auditors encountered the following separate situations when deciding on

Assume that the auditors encountered the following separate situations when deciding on the report to issue for the current-year financial statements. 1. The auditors decided that sufficient appropri...

Q: Classify the following events as mostly systematic or mostly unsystematic. Is

Classify the following events as mostly systematic or mostly unsystematic. Is the distinction clear in every case? a. Short-term interest rates increase unexpectedly. b. The interest rate a company pa...

Q: Tony Chase, Inc., the motorcycle manufacturer, included the following

Tony Chase, Inc., the motorcycle manufacturer, included the following note in its annual report: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 7 (In Part): Commitments and Contingencies The Company self-...

Q: The IASB Web site (www.iasb.org) summarizes

The IASB Web site (www.iasb.org) summarizes each of the current International Financial Reporting Standards. Required: Answer each of the following questions. a. In measuring inventories at the lowe...

Q: For each of the following situations, determine whether the company should

For each of the following situations, determine whether the company should (a) report a liability on the balance sheet, (b) disclose a contingent liability, or (c) not report the situation. Justify...

Q: Ashley runs a small business in Boulder, Colorado, that makes

Ashley runs a small business in Boulder, Colorado, that makes snow skis. She expects the business to grow substantially over the next three years. Because she is concerned about product liability and...

Q: GE Oil & Gas, Inc., is a company that manufactures

GE Oil & Gas, Inc., is a company that manufactures gas compressors. Berge Helene owns a large barge that it leases to oil companies for purposes of storing and producing petroleum offshore. GE Oil & G...

Q: Mrs. Downing was fitted for dentures by a dentist, Dr

Mrs. Downing was fitted for dentures by a dentist, Dr. Cook. After she received her dentures, Mrs. Downing began experiencing mouth pain that she attributed to Dr. Cook’s manufacture of dentures that...

Q: Phatboy Motorcycles, Inc., a motorcycle manufacturer, included the following

Phatboy Motorcycles, Inc., a motorcycle manufacturer, included the following note in its annual report: Notes to Consolidated Financial Statements Commitments and Contingencies The Company self-insur...

Q: The following information shows last year’s quality-related costs for the

The following information shows last year’s quality-related costs for the Madrigal Company: Total sales for the year were $120,000,000. Required (a) Prepare a cost-of-quality repor...

Q: The following data have just been gathered on last year’s quality-

The following data have just been gathered on last year’s quality-related costs at the Ideal Company: Total sales last year were $75,000,000. Required (a) Prepare a cost-of-quality...

Q: Sea Green Enterprises reports the following assets and liabilities on its balance

Sea Green Enterprises reports the following assets and liabilities on its balance sheet. Sea Green has just lost a product liability suit with damages of $10 million being awarded to the plaintiff. A...

Q: The following items were selected from among the transactions completed by O’Donnel

The following items were selected from among the transactions completed by O’Donnel Co. during the current year: Jan. 10. Purchased merchandise on account from Laine Co., $240,000, terms n/30. Feb....

Q: Shalene Kolchek bought a Great Lakes Spa from Val Porter, a

Shalene Kolchek bought a Great Lakes Spa from Val Porter, a dealer who was selling spas at the state fair. After Kolchek signed the contract, Porter handed her the manufacturer’s paperwork and arrange...

Q: Jason Clark, an experienced hunter, bought a paintball gun.

Jason Clark, an experienced hunter, bought a paintball gun. Clark practiced with the gun and knew how to screw in the carbon dioxide cartridge, pump the gun, and use its safety and trigger. Although C...

Q: Brandon Stroud was driving a golf car made by Textron, Inc

Brandon Stroud was driving a golf car made by Textron, Inc. The golf car did not have lights, but Textron did not warn against using it on public roads at night. When Stroud attempted to cross a road...

Q: Yun Tung Chow tried to unclog a floor drain in the kitchen

Yun Tung Chow tried to unclog a floor drain in the kitchen of the restaurant where he worked. He used a drain cleaner called Lewis Red Devil Lye that contained crystalline sodium hydroxide. The produc...

Q: David Dobrovolny bought a new Ford F-350 pickup truck.

David Dobrovolny bought a new Ford F-350 pickup truck. A year later, the truck spontaneously caught fire in Dobrovolny’s driveway. The truck was destroyed, but no other property was damaged, and no on...

Q: Bret D’Auguste was an experienced skier when he rented equipment to ski

Bret D’Auguste was an experienced skier when he rented equipment to ski at Hunter Mountain Ski Bowl in New York. When D’Auguste entered an extremely difficult trail, he noticed immediately that the su...

Q: What defenses to liability can be raised in a product liability lawsuit

What defenses to liability can be raised in a product liability lawsuit?

Q: An American consulting firm is planning to expand globally by opening a

An American consulting firm is planning to expand globally by opening a new office in one of four countries: Germany, Italy, Spain, or Greece. The chief partner entrusted with the decision, L. Wayne S...

Q: Through its three sets of elements (motivational, informational, and

Through its three sets of elements (motivational, informational, and reporting), a CMS focuses the attention of a given decision maker on the data and information that are crucial to that decision mak...

Q: Matrixx Initiatives, Inc., makes and sells over-the-

Matrixx Initiatives, Inc., makes and sells over-the-counter pharmaceutical products. Its core brand is Zicam, which accounts for 70 percent of its sales. Matrixx received reports that some consumers h...

Q: Classify the following events as mostly systematic or mostly unsystematic. Is

Classify the following events as mostly systematic or mostly unsystematic. Is the distinction clear in every case? a. Short-term interest rates increase unexpectedly. b. The interest rate a company pa...

Q: Flatworld Shipping Company reports taxable income of $912,000 on

Flatworld Shipping Company reports taxable income of $912,000 on its income tax return for the year ended December 31, 2013, its first year of operations. Temporary differences between financial incom...

Q: The Robinsons, residents of New York, bought a new Audi

The Robinsons, residents of New York, bought a new Audi car from Seaway Volkswagen Corp., a retailer that was incorporated in New York and had its principal place of business there. World-Wide Volkswa...

Q: For sixteen years, the late Mrs. Dorothy Mae Palmer was

For sixteen years, the late Mrs. Dorothy Mae Palmer was married to Mr. Schultz, an insulator who worked with asbestos products. Mrs. Palmer was not exposed to asbestos dust in a factory setting; rathe...

Q: The following items were selected from among the transactions completed by Sherwood

The following items were selected from among the transactions completed by Sherwood Co. during the current year: Instructions: 1. Journalize the transactions. 2. Journalize the adjusting entry for e...

Q: Classify the following events as mostly systematic or mostly unsystematic. Is

Classify the following events as mostly systematic or mostly unsystematic. Is the distinction clear in every case? a. Short-term interest rates increase unexpectedly. b. The interest rate a company pa...

Q: Cassara, Inc., had the following quality costs for the years

Cassara, Inc., had the following quality costs for the years ended December 31, 20X1 and 20X2: At the end of 20X1, management decided to increase its investment in control costs by 40% for each cate...

Q: Describe product liability and the tort upon which it is based.

Describe product liability and the tort upon which it is based.

Q: Describe product liability and the tort upon which it is based.

Describe product liability and the tort upon which it is based.

Q: Discuss several bases of claims often used against manufacturers and sellers in

Discuss several bases of claims often used against manufacturers and sellers in product liability lawsuits.

Q: Indicate whether each of the following statements is true or false.

Indicate whether each of the following statements is true or false. 7. Both breach of warranty and product liability lawsuits are based on tort law rather than contract law. 8. The four elements of a...

Q: Kriz, an elderly man who was quite overweight, purchased a

Kriz, an elderly man who was quite overweight, purchased a power lawnmower from a nationally known retailer. To start the lawnmower, the user needed to bend down to draw the starter cord. When Kriz be...

Q: Eddington operated a toy store and carried merchandise from both domestic as

Eddington operated a toy store and carried merchandise from both domestic as well as foreign manufacturers. As the holiday season approached, he found that he could reduce his costs by importing a stu...

Q: Taser International, Inc. manufactures a product commonly known as a

Taser International, Inc. manufactures a product commonly known as a “taser.” Tasers have prongs or cords that emit high-voltage electrical currents that when they touch a person’s body, immobilize th...

Q: Vaccines are biological preparations usually containing an agent that resembles a disease

Vaccines are biological preparations usually containing an agent that resembles a disease-causing microorganism, which is often administered by needle and which improves immunity to a particular disea...

Q: Butler Manufacturing Corporation planned to raise capital for a plant expansion by

Butler Manufacturing Corporation planned to raise capital for a plant expansion by borrowing from banks and making several stock offerings. Butler engaged Meng, CPA, to audit its financial statements....

Q: Hamm Cycles, Inc., the motorcycle manufacturer, included the following

Hamm Cycles, Inc., the motorcycle manufacturer, included the following note in its annual report: 1. Why are these contingent (versus real) liabilities? 2. In the United States, how can the conting...

Q: Asahi Metal Industry, a Japanese corporation, manufactured valve assemblies in

Asahi Metal Industry, a Japanese corporation, manufactured valve assemblies in Japan and sold them to tire manufacturers including Cheng Shin (a Taiwanese corporation) from 1978 to 1982. Cheng Shin so...

Q: Nicastro was severely injured at his workplace in New Jersey by

Nicastro was severely injured at his workplace in New Jersey by an industrial metal shearing machine manufactured by J. McIntyre Machinery, Ltd., an English company. Nicastro filed a product liabili...

Q: How does negligence-based product liability differ from strict product liability

How does negligence-based product liability differ from strict product liability?

Q: What types of defects are recognized in product liability law?

What types of defects are recognized in product liability law?

Q: 1. OptiAmp Corp. promises you that its electrical equipment will

1. OptiAmp Corp. promises you that its electrical equipment will meet the needs of any venue from a stadium to a café. You buy the equipment for Playtime, your urban rap club, but it is not sufficient...

Q: To avoid liability on a negligence theory in a product liability suit

To avoid liability on a negligence theory in a product liability suit, to what extent must a manufacturer exercise due care?

Q: What are the requirements for a cause of action in strict liability

What are the requirements for a cause of action in strict liability in a product liability suit?

Q: Ashley runs a small business in Boulder, Colorado, that makes

Ashley runs a small business in Boulder, Colorado, that makes snow skis. She expects the business to grow substantially over the next three years. Because she is concerned about product liability and...

Q: Donald Hodge was hunting in a deer stand when its straps—

Donald Hodge was hunting in a deer stand when its straps—which held Hodge high up in a tree—failed. When the straps failed, Hodge and the deer stand fell to the ground, killing Hodge. Louisiana-based...

Q: There are many interesting company programs and circumstances that relate to the

There are many interesting company programs and circumstances that relate to the definition, recognition, and measurement of liabilities. Examples include customer loyalty programs, retail gift cards,...

Q: The following items were selected from among the transactions completed by Pioneer

The following items were selected from among the transactions completed by Pioneer Co. during the current year: Mar. 1. Purchased merchandise on account from Galston Co., $360,000, terms n/30. 31. Iss...

Q: Rufous Corporation just lost a $1.5 million product liability

Rufous Corporation just lost a $1.5 million product liability lawsuit. Its assets currently are worth $2 million, and its outstanding liabilities amount to $800,000 without considering the lawsuit los...

Q: Identify the principal reasons why we have a product liability crisis.

Identify the principal reasons why we have a product liability crisis. Have any reasons been omitted? Discuss.

Q: The consolidated statement of cash flows for CSR Ltd for the year

The consolidated statement of cash flows for CSR Ltd for the year ended 31 March 2018 is presented below. Required (a) What information does the statement of cash flows provide? (b) Outline the two d...

Q: Phatboy Motorcycles, Inc., a motorcycle manufacturer, included the following

Phatboy Motorcycles, Inc., a motorcycle manufacturer, included the following note in its annual report: Requirements 1. Why are product liability losses considered contingent liabilities? 2. How can...

Q: The first group will take the position of the manufacturer and develop

The first group will take the position of the manufacturer and develop an argument for why the court should grant the summary judgment motion and dismiss the strict product liability claim. (b) The s...

Q: While replacing screws in a gutter, John Baugh fell off a

While replacing screws in a gutter, John Baugh fell off a ladder and landed headfirst on his concrete drive way. He sustained a severe brain injury, which permanently limited his ability to perform ro...

Q: The following items were selected from among the transactions completed by Sherwood

The following items were selected from among the transactions completed by Sherwood Co. during the current year: Mar. 1. Purchased merchandise on account from Kirkwood Co., $215,000, terms n/30. 31....

Q: Bret D’Auguste was an experienced skier when he rented equipment to ski

Bret D’Auguste was an experienced skier when he rented equipment to ski at Hunter Mountain Ski Bowl in New York. When D’Auguste entered an extremely difficult trail, he noticed immediately that the su...

Q: The following items were selected from among the transactions completed by Shin

The following items were selected from among the transactions completed by Shin Co. during the current year: Jan. 10. Purchased merchandise on account from Beckham Co., $420,000, terms n/30. Feb. 9. I...

Q: External failure costs include all of the following costs except those related

External failure costs include all of the following costs except those related to: a. lost sales and lost customers. b. warranty obligations. c. product liability suits. d. product field testing.

Q: For each of the following subsequent event financial statement disclosures, determine

For each of the following subsequent event financial statement disclosures, determine whether the treatment is proper. The fiscal year-end is December 31 in each scenario. The financial statements are...

Q: Far Out Producers is involved in two product liability lawsuits and a

Far Out 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, Year 1, the company’s attorne...

Q: Exwella Pharmaceuticals, Inc. is involved in various lawsuits regarding product

Exwella Pharmaceuticals, Inc. is involved in various lawsuits regarding product liability, commercial liability, and other matters that arise from time to time in the ordinary course of business. The...

Q: Using the information from P13-5, assume that Exwella Pharmaceuticals

Using the information from P13-5, assume that Exwella Pharmaceuticals, Inc., reports under IFRS. Required: a. Explain how each lawsuit is accounted for under IFRS. Prepare any journal entries requi...

Q: The following are selected items from the accounting records of Georgia Peach

The following are selected items from the accounting records of Georgia Peach for the year ended December 31, 2021. Other Information 1. The note payable to Smithfield Bank is due in 60 days. Arrang...

Q: Explain why each of the following is reported as a contingent liability

Explain why each of the following is reported as a contingent liability but not recognized as a provision in the statement of financial position (balance sheet). (a) Some leasehold properties which th...

Q: On August 9, 2000, 6.5 million Firestone tires

On August 9, 2000, 6.5 million Firestone tires were recalled in the United States.1 One thousand five hundred and ninety- nine ATX, ATXII, and Wilderness AT tires installed on Ford Explorers were to b...

Q: The information below relates to the audit of EyeMax Corporation, a

The information below relates to the audit of EyeMax Corporation, a client with a calendar year-end. EyeMax has debt agreements associated with publicly traded bonds that require audited financial sta...