Chapter 11, Problem 11.7CP

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 state: the major business units of Incorporation R.

B.

To determine

To explain: the reason for Incorporation R requiring so many pages of contingency liabilities.