Decorative Concrete produces a concrete overlay for residentlal and commerclal concrete flooring. Customers have complained that one of the products results In excessive cracking. The likelihood the company will Incur a loss on this product Is probable and the amount of the loss Is estimated to be somewhere between $1.3 and $5 million. 1. Should this contingent liablity be reported, disclosed In a note only, or both? • To be reported O To be disclosed O Both 2. What loss, if any, should Decorative Concrete report In Its Income statement? (Enter your answers In dollars, not In millons.) Loss to be reported 3. What llability, If any, should Decorative Concrete report In Its balance sheet? (Enter your answers In dollars, not In millons.) Liability to be reported 4. What entry, If any, should be recorded? (If no entry Is required for a particular transaction/event, select "No Journal Entry Requlred" in the first account fleld. Enter your answers In dollars, not In millons.) View transaction list Journal entry worksheet Record the contingent liability if needed. Notei Enter debits before credits. Transaction General Journal Debit Credit 1.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Decorative Concrete produces a concrete overlay for resldentlal and commerclal concrete flooring. Customers have complained that
one of the products results In excessive crackIng. The likelihood the company will Incur a loss on this product Is probable and the
amount of the loss Is estimated to be somewhere between $1.3 and $5 million.
1. Should this contingent liability be reported, disclosed In a note only, or both?
O To be reported
O To be disclosed
O Both
2. What loss, If any, should Decorative Concrete report In Its Income statement? (Enter your answers In dollars, not In mlllons.)
Loss to be reported
3. What llabllity, If any, should Decorative Concrete report In Its balance sheet? (Enter your answers In dollars, not In mllllons.)
Liability to be reported
4. What entry, If any, should be recorded? (If no entry is requlred for a particular transaction/event, select "No Journal Entry
Requlred" In the first account fleld. Enter your answers In dollars, not In millons.)
View transaction list
Journal entry worksheet
Record the contingent liability if needed.
Note: Enter debits before credits.
Transaction
General Journal
Debit
Credit
1.
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24 of 50
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Transcribed Image Text:Decorative Concrete produces a concrete overlay for resldentlal and commerclal concrete flooring. Customers have complained that one of the products results In excessive crackIng. The likelihood the company will Incur a loss on this product Is probable and the amount of the loss Is estimated to be somewhere between $1.3 and $5 million. 1. Should this contingent liability be reported, disclosed In a note only, or both? O To be reported O To be disclosed O Both 2. What loss, If any, should Decorative Concrete report In Its Income statement? (Enter your answers In dollars, not In mlllons.) Loss to be reported 3. What llabllity, If any, should Decorative Concrete report In Its balance sheet? (Enter your answers In dollars, not In mllllons.) Liability to be reported 4. What entry, If any, should be recorded? (If no entry is requlred for a particular transaction/event, select "No Journal Entry Requlred" In the first account fleld. Enter your answers In dollars, not In millons.) View transaction list Journal entry worksheet Record the contingent liability if needed. Note: Enter debits before credits. Transaction General Journal Debit Credit 1. < Prev 24 of 50 pe here to search 99+
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