Chapter 10, Problem 10.24EX

A.

To determine

Contingent liability:  It is a potential liability of a company that depends on a future event. It is the result of an uncertain event. For paying a contingent liability, some event should happen in the future. The recording of contingent liability is based on the following likelihoods of the event occur in future:

• Remote
• Reasonably possible
• Probable

To Journalize: The contingent liabilities.

B.

To determine

To prepare: a note disclosure related to the incident.