Critical Element IA
A contingent liability is a liability account used by partnerships and corporations to classify pending losses from uncertain occurrences like damage estimates from potential lawsuits for example. Partnerships and corporations report their respective contingent liabilities based on the passing of two vital criteria: (1) determining the likelihood that the estimates owed will reach imminence and (2) whether or not the amount of the contingent liability is estimable. Financial reporting of contingent liabilities is further broken down into three levels (low, medium, and high) that designate the probability of the contingent liability actually occurring. After designating the level of probability to the contingent liability,
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Using the reporting and disclosure criteria, Wal-Mart will not be designating its potential contingent liability as either a low or a medium probability. The company will designate the contingent liability utilizing the high probability level instead. High probability signifies that there is a heightened likelihood that the contingent liability will occur and the damage estimate will have a determinable value. High probability contingent liabilities require businesses to report and disclose the damage estimate on their financial statements. Therefore, it is Wal-Mart’s responsibility as either business entity to report the $2,000,000 contingent liability on the appropriate financial statements as well as disclose its existence as a footnote. Recording the existence of the contingent liability requires a debit to a lawsuit-related account and a credit to a contingent liability account. The corresponding payment regarding the damage estimate require a debit to a lawsuit-related account as well as as credit to the Cash account. To record the damage estimates as a contingent liability, Wal-Mart will debit an Administrative Expense account and credit Accrued Liabilities for $2,000,000 each. Once the settlement is paid, Accrued Liabilities will be debited for $2,000,000 and Cash will be credited for $2,000,000. The same journal entry will occur if Wal-Mart pays increments in place of a lump sum …show more content…
Both business entities debit a lawsuit related expense account that is later transferred to the Income Statement as an increase to Operating, Selling, General, and Administrative Expenses. Each business entity’s Net Income/Loss is computed the exact same way, but partnerships treat the transference of net income/loss to their next financial statement differently than the corporation. Therefore, Wal-Mart’s Net Income/Loss is either transferred to the corporation’s Statement of Retained Earnings, or the partnership’s Statement of Partner’s Capital. In a partnership, the distribution of Net Income/Loss is allocated to each partner based on his or her business interest. The ending balances transfer to either the corporation’s Shareholder’s Equity section or the partnership’s Partners’ Capital section of the Balance Sheet. Changes on the Balance Sheet depend on when Wal-Mart pays the $2,000,000 settlement, so there will either be a decrease in Cash or an increase in Accrued Liabilities. The only impact on the Statement of Cash Flows is the decrease in Accrued Liabilities in the Operating Activities section when the lawsuit is paid (Annual Report 2016) (Rogers
One has to work hard to consider their values in particular issues and how strongly they feel. This is the choice many people make when they invest in mutual funds, and have no idea where their mutual funds are invested. Many vocal opponents to shopping at Wal-Mart might discover they hold investments in the Wal-Mart. There are 1050 mutual funds that are invested in Wal-Mart, some of the largest mutual funds in the world. There are many people who have no idea where their investments lie. If you want to be true to your value against shopping at Wal-Mart, you need to be careful to remove yourself from investments that support Wal-Mart. You have to review your investments and find out where your money is invested.
Facts: On September 8, 2009, while 73 year old plaintiff Sandra Primrose was shopping in a Wal-Mart, tripped over a watermelon display and fell, causing her to sustain a concussion and other serious injuries. After grabbing a watermelon from the display Ms. Primrose tripped over one of the corners while returning back to her shopping cart. On the same day after her incident Ms. Primrose filed a suit for damages against Wal-Mart claiming that it was the store owner’s negligence that led to her accident. On October 15, Wal-Mart filed a motion for summary judgment which was granted under La. Rev. Stat. Ann. § 9:2800.6 stating that there was a very small chance
Wal-Mart represents the sickness of capitalism at its almost fully evolved state. As Jim Hightower said, "Why single out Wal-Mart? Because it's a hog. Despite the homespun image it cultivates in its ads, it operates with an arrogance and avarice that would make Enron blush and John D. Rockefeller envious. It's the world's biggest retail corporation and America's largest private employer; Sam Robson Walton, a member of the ruling family, is one of the richest people on earth. Wal-Mart and the Waltons got to the top the old-fashioned way: by roughing people up. Their low, low prices are the product of two ruthless commandments: Extract the last penny possible from human toil and squeeze the last dime from its thousands of suppliers, who are left with no profit margin unless they adopt the Wal-Mart model of using nonunion labor and shipping production to low-wage hellholes abroad." (The Nation, March 4th 2002 www.thenation.com/doc.mhtml?i=20020304&s=hightower).
Wal-Mart is one of the largest corporations in the world, and leads the pack of American retail stores in terms of size and sales income. The size of Wal-Mart allows the store to provide consumers with lower prices than most other retail chains, and much lower prices than small, "mom and pop" stores. Because of these reasons, is Wal-Mart a help or a hindrance; should Wal-Mart be given special consideration (i.e. tax breaks, location decisions); and should Wal-Mart be held responsible for improving economic and social conditions in communities in which it operates?
Is Wal-Mart a More Positive or Negative Force in America? Wal-Mart is a chain of stores. It operates in a very vast market. This company comes with both advantages and disadvantages. It has changed the relationship between big-box retailers and manufacturers.
Jeffrey Seglin, a business ethics columnist for the New York Times, participated in an event sponsored by Markkula Center for Applied Ethics. He described two Wal-Marts one as evil and one as good. The evil company is very, very big and does everything to grow bigger. They use illegal immigrants to mop floors and are accused of locking employees inside overnight. They practice gender discrimination, pay low wages and deteriorate suppliers and competition. The bad one "is the enemy of all that’s good and right in our nation" (Seglin, 2004).
Because the business is has inquired a lawsuit for breach of contract, I have includeda matrix chart to compare and contrast the personal liability as an owner. We will be able to recognize the lawsuits as a result of the expose of the company.
The Wal-Mart Corporation is a multi-billion dollar low-cost retail organization, consisting of 6400 stores and 1.8 million sales associates worldwide. Wal-Mart’s influence on the retail world and the enormity of their corporate size is unparalleled. Wal-Mart can easily report sales of $312.4 billion dollars per fiscal quarter and net profits of $3.8 billion dollars. Wal-Mart promises her customers "Always low prices. Always!" and upholds this motto by providing low prices to her customers and high return on investment to her stockholders. One way that Wal-Mart has managed to maintain a competitive edge over other low cost retail giants and provide low prices is by cutting wages and by not offering too many company benefits to their employees. Full-time employee working at Wal-Mart only make $8 an hour, while only 45% of the workers can afford to be covered by health insurance. Wal-Mart also increase part time employees from 20 percent to 40 percent so that they do not have to cover all of their employees for health insurance . Although Wal-Mart may not provide excellent benefits to her employees, it successfully performs as a legitimate business operating in a capitalistic society. Wal-Mart upholds the primary fiduciary duty to satisfy her stockholder and follows free the market libertarianism model, which states that a business should not interfering with the free market. In a free market Wal-Mart has a direct responsibility to her primary stockholders rather than the employees of a company.
In the 1960s through the 1970s, companies realized strong engineering, design, and manufacturing functions were strong market strategy keys to create and capture customer loyalty. As the demand for new products rose in the 1980s, these market requirements were to increase their flexibility and responsiveness to adapt existing products and processes or to develop new ones in order to meet customer needs. As manufacturing improved in the 1990s, managers began noticing material and service inputs involving suppliers and their major impact on an organization’s ability to meet customer needs. As a result of these changes, organizations now find that it difficult to manage their own organizations. First, they must be involved in the management of their network of all upstream firms that provide directly or indirectly, as well as the network of downstream firms, which are responsible for delivery and market service of the product to the end customer. In order to succeed, managers have to realize that they cannot do it alone and they must work together on a daily basis with the whole organizations in their supply chains. Because supply chain management involves all functions within an organization, managers need to know what a supply chain is, why it is important, and the impact of supply chain management on the success and profitability of their organization. Today, Wal-Mart topped the list of the America’s biggest companies on the Fortune 500 list, “with sales of almost $345 billion — more than a quarter of a trillion dollars” (Forbs). Wal-Mart’s supply chain management is becoming recognized as a core competitive strategy.
Company Selection Paper Team B's assignment this week was to select two different publicly traded companies in the same industry. The two companies will serve as the basis for subsequent team assignments. The two companies chosen for the study are Wal-Mart and Target. This paper provides an overview of each of the selected companies. Date of Company Establishment Wal-Mart was established in 1962 by Sam Walton.
It’s a place everyone knows, much like the post office or even city hall. Wal-Mart. That is where the oddity lies, in the fact that a retail store is just as well known as staples for towns across the nation; not to mention the fact that Wal-Mart isn’t just in the United States, but around the world. Founder of the billion dollar industry, Sam Walton, did expect success from his endeavor, but no one could have foreseen just how influential the retail store would be. Wal-Mart is an astonishingly successful business with humble beginnings, but may have a rocky road ahead in terms of social issues due to the treatment of employees and it's strong effects on the economy.
The decision to terminate an employee may be difficult for some managers depending on the situation at hand. Today, many states have adopted the employment at will law to fire employees for any or no reason, with the exception of employees that have a contract in place. According to Erickson (2008), “The basis for an employer to terminate an employee without being sued is the employment-at-will doctrine. This doctrine is a statement that is signed by both the employee and employer at the time of hire that states that the employee can quit at any time for any reason without notice and that the employer can terminate the employee at any time for any legal reason.” On the contrary to the definition of “At-Will” employment, Pozgar (2012) states, “The employment-at-will common law doctrine is not truly applicable in today’s society and many courts have recognized this fact. The twentieth century has witnessed significant changes in socio-economic values that have led to reassessment of the common law rule (p. 494). An example of an organization hiring on an employment on an at-will basis but terminating an employee without justifying the cause of action was the case of Joseph Casias versus Corporation. By law, an employer has to follow guidelines that essentially make ethos rules null and void because there is nothing to adhere to, especially in a circumstance where the employee is terminated by the at-will policy. In this situation, if the employer terminated by allegations that this employee was an active drug user. However, by law, according to Mr. Casias and his attorney, this employee had legitimate reasons for being involved in obtaining and smoking marijuana. As discussed in the case, the law protect employees from illegitimate...
Credit Risk: Financial instruments that possibly subject the Company to concentrations of credit risk consist of cash equivalents and receivables. Due to its large and varied customer base and its geographic diversity, Saputo has low exposure to credit risk concentration with respect to customer’s receivables. There are no receivables from any individual customer that exceeded 10% of the total balance of receivables as at March 31, 2015 and March 31, 2014. However one customer represented more than 10% of total consolidated sales for the year ended March 31, 2015, with 10.2% (one customer with 11.4% in 2014). Allowance for doubtful accounts and past due receivables are reviewed by management at each balance sheet date. The company updates its estimate of the allowance for doubtful accounts based on the assessment of the recoverability of receivable balances from each customer taking into account historic collection trends of past due accounts. Receivables are written off once determined not to be collectible. On average, Saputo will generally have 10% of receivables that are due beyond normal terms, but are not decreased. However, Saputo management does not believe that these allowances
Environmental Studies is the academic field, which systematically studies human interaction with the environment in which we live in. It is a broad field of study that includes the natural environment, built environment, and the sets of relationships between them. Environmental studies takes into account many different factors that help provide an enjoyable, fruitful way of life, such as national policies, politics, laws, economics, sociology and other social aspects, planning, pollution control, natural resources, and the interactions of human beings and nature.
Wal-Mart Stores, Inc. is a renowned retail goods superstore that sits atop the Fortune list at number one. It would be very difficult to find an individual who is unaware of Walmart’s position as the largest brick-and-mortar retail chain in the world. The company has thrived over the past few years and is continuing to grow by effectively managing its store operations and distribution strategies. One of the major contributors to the business consistently meeting market expectations is directly attributable to their management approach. Walmart has revolutionized the way retail companies manage their supply chains in more ways than one. But, perhaps the most revolutionary was the practice of unprecedented coordination with suppliers (Chekwa,