Journalize the contingent liabilities.

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Answer 1

Question

Definition Definition Costs that a business is responsible for paying, should a particular event potentially occur in the future. Also called a potential liability, a contingent liability is generally recorded only when the amount of liability can be reasonably estimated and the contingency is likely to occur shortly. The Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Principles (IFRS) make it mandatory for the companies to record any contingent liability taking the principles of full disclosure, materiality, and prudence into consideration.

Chapter 10, Problem 24E

A.

To determine

Journalize the contingent liabilities.

B.

To determine

Prepare a note disclosure related to the incident.

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Gorman Nurseries Inc. grows poinsettias and fruit trees in a green house/nursery operation. The following information was provided for the coming year. Sales $9,70,000 $31,00,000 Variable cost of goods sold 4,60,000 16,30,000 1,60,000 2,00,000 Direct fixed overhead A sales commission of 4% of sales is paid for each of the two product lines. Direct fixed selling and administrative expense was estimated to be $146,000 for the poinsettia line and $87,000 for the fruit tree line. Common fixed overhead for the nursery operation was estimated to be $800,000; common selling and administrative expense was estimated to be $450,000. Prepare a segmented income statement for Gorman Nurseries for the coming year, using variable costing.

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Answer 2

Question

Definition Definition Costs that a business is responsible for paying, should a particular event potentially occur in the future. Also called a potential liability, a contingent liability is generally recorded only when the amount of liability can be reasonably estimated and the contingency is likely to occur shortly. The Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Principles (IFRS) make it mandatory for the companies to record any contingent liability taking the principles of full disclosure, materiality, and prudence into consideration.

Chapter 10, Problem 24E

A.

To determine

Journalize the contingent liabilities.

B.

To determine

Prepare a note disclosure related to the incident.

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Answer 3

Question

Definition Definition Costs that a business is responsible for paying, should a particular event potentially occur in the future. Also called a potential liability, a contingent liability is generally recorded only when the amount of liability can be reasonably estimated and the contingency is likely to occur shortly. The Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Principles (IFRS) make it mandatory for the companies to record any contingent liability taking the principles of full disclosure, materiality, and prudence into consideration.

Chapter 10, Problem 24E

A.

To determine

Journalize the contingent liabilities.

B.

To determine

Prepare a note disclosure related to the incident.

Expert Solution & Answer

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Check out a sample textbook solution

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Answer 4

Question

Definition Definition Costs that a business is responsible for paying, should a particular event potentially occur in the future. Also called a potential liability, a contingent liability is generally recorded only when the amount of liability can be reasonably estimated and the contingency is likely to occur shortly. The Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Principles (IFRS) make it mandatory for the companies to record any contingent liability taking the principles of full disclosure, materiality, and prudence into consideration.

Chapter 10, Problem 24E

A.

To determine

Journalize the contingent liabilities.

B.

To determine

Prepare a note disclosure related to the incident.

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Answer 5

Chapter 10, Problem 24E

A.

To determine

Journalize the contingent liabilities.

B.

To determine

Prepare a note disclosure related to the incident.

Answer 6

Chapter 10, Problem 24E

A.

To determine

Journalize the contingent liabilities.

Answer 7

Chapter 10, Problem 24E

A.

To determine

Journalize the contingent liabilities.

Answer 8

B.

To determine

Prepare a note disclosure related to the incident.

Answer 9

B.

To determine

Prepare a note disclosure related to the incident.

Answer 10

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Answer 11

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Answer 12

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Answer 13

Ch. 10 - Does a discounted note payable provide credit...Ch. 10 - Employees are subject to taxes withheld from their...Ch. 10 - Prob. 3DQ Ch. 10 - Prob. 4DQ Ch. 10 - Prob. 5DQ Ch. 10 - Prob. 6DQ Ch. 10 - Prob. 7DQ Ch. 10 - Installment notes require equal periodic payments....Ch. 10 - Prob. 9DQ Ch. 10 - Prob. 10DQ

Journalize the contingent liabilities.

Solution Summary: The author explains that a company's contingent liability is based on the likelihoods of an event occurring in the future.

Journalize the contingent liabilities.

Prepare a note disclosure related to the incident.

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