Several things have happened to Freedom Airlines Freedom estimates that $700,000 of its accounts receivable will prove to be uncollectible. The company’s president is in poor health and has previously suffered two heart attacks. As with any airline, Freedom faces the risk that a future airplane crash could cause considerable loss. Freedom is being sued for $2 million for failing to adequately provide alternative service for passengers whose reservations were canceled as a result of the airline’s overbooking of certain flights. This suit will not be resolved for a year or more. b. Make a general statement that summarizes management’s ethical responsibility regarding reporting loss contingencies in its financial statements.

Liabilities that are contingent on the outcome of an uncertain event are known as contingent…

Answered: Several things have happened to Freedom…

Business Its Legal Ethical & Global Environment

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ISBN:9781305224414

Author:JENNINGS

Publisher:JENNINGS

Chapter2: Business Ethics And Social Responsibility

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Several things have happened to Freedom Airlines

Freedom estimates that $700,000 of its accounts receivable will prove to be uncollectible.
The company’s president is in poor health and has previously suffered two heart attacks.
As with any airline, Freedom faces the risk that a future airplane crash could cause considerable loss.
Freedom is being sued for $2 million for failing to adequately provide alternative service for passengers whose reservations were canceled as a result of the airline’s overbooking of certain flights. This suit will not be resolved for a year or more.

b. Make a general statement that summarizes management’s ethical responsibility regarding reporting loss contingencies in its financial statements.

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Accounting for Current liabilities, Provisions and Contingencies

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