For each separate situation, indicate whether Cruz Company should (a) record a liability, (b) disclose in notes, or (c) have no disclosure. 1. Cruz Company guarantees the $101,000 debt of a supplier. It is not probable that the supplier will default on the debt. 2. A disgruntled employee is suing Cruz Company. Legal advisers believe that the company will likely need to pay damages, but the amount cannot be reasonably estimated
For each separate situation, indicate whether Cruz Company should (a) record a liability, (b) disclose in notes, or (c) have no disclosure. 1. Cruz Company guarantees the $101,000 debt of a supplier. It is not probable that the supplier will default on the debt. 2. A disgruntled employee is suing Cruz Company. Legal advisers believe that the company will likely need to pay damages, but the amount cannot be reasonably estimated
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter8: Current And Contingent Liabilities
Section: Chapter Questions
Problem 70E
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