6.During the 1990's, Golden Inc. entered into long-term contracts with corporate customers to supply one million ounces of ore for $100 an ounce over the next 5 years. During the following years, the...

6.During the 1990's, Golden Inc. entered into long-term contracts with corporate customers to supply one million ounces of ore for $100 an ounce over the next 5 years. During the following years, the price of ore increased to $175 an ounce, which Golden Inc., because it did not hedge the price, would have to pay in order to meet its sales contracts. Although Golden Inc.'s auditor argued that a $75 million loss and liability should be recognized, Golden Inc. stated that the amount of the loss cannot be reasonably estimated prior to the results of renegotiations it was conducting with its corporate customers. Golden Inc. expected to renegotiate an increase in the initial contract price of $150 or reduce the amount of ounces to be delivered under the long-term sales contract. Defend a position of how the long-term contract should be treated from an accounting perspective.

7.Identify the primary problem related to current liabilities.

8.How do ‘determinable’ current liabilities differ from ‘contingent’ liabilities?

9
.Sunshine Company obtained a line of credit with its bank of $4 million. How should Sunshine Company disclose the line of credit on its financial statements?

10.Identify two different third-party collections and explain why they should be reported as liabilities.