Listed below are selected transactions of Baileys Department Store for the current year ending December 31.
1. On December 5, the store received $500 from the Jackson Players as a deposit to be returned after certain furniture to be used in stage production was returned on January 15.
2. During December, cash sales totalled $798,000, which includes the 5% sales tax that must be remitted to the state by the fifteenth day of the following month.
3. On December 10, the store purchased for cash three delivery trucks for $120,000. The trucks were purchased in a state that applies a 5% sales tax.
4. Baileys determined it will cost $100,000 to restore the area (considered a land improvement) surrounding one of its parking lots, when the store closes in 2 years. Baileys estimates the fair value of the obligation at December 31 is $84,000.
5. As a result of uninsured accidents during the year, personal injury suits for $350,000 and $60,000 have been filed against the company. It is the judgment of Baileys legal counsel that an unfavourable outcome is unlikely in the $60,000 case but that an unfavourable verdict approximating $250,000 (reliably estimated) will probably result in the $350,000 case.
6. Baileys Midwest store division, consisting of 12 stores in Tornado Alley, is uninsurable because of the special risk of injury to customers and employees, losses due to severe weather, and subpar construction standards in older malls. The year 2022 is considered one of the safest (luckiest) in the divisions history because no loss due to injury or casualty was suffered. Having suffered an average of three casualties a year in the last decade (ranging from $60,000 to $700,000), management is certain that next year the company will probably not be so fortunate.
