Contingent liability : A contingent liability is not an actual liability but a potential liability which may or may not convert into an actual liability on the occurrence or non-occurrence of an event. The contingent liabilities which are probable and the amount can be reasonably estimated are recorded in the books of accounts. If the contingency is not probable of occurring or the amount cannot be ascertained, then it will not be recorded in the books but will be disclosed in the notes to the accounts. To explain: The contingent liability with examples

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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 11, Problem 13RQ

To determine

Contingent liability:

A contingent liability is not an actual liability but a potential liability which may or may not convert into an actual liability on the occurrence or non-occurrence of an event. The contingent liabilities which are probable and the amount can be reasonably estimated are recorded in the books of accounts. If the contingency is not probable of occurring or the amount cannot be ascertained, then it will not be recorded in the books but will be disclosed in the notes to the accounts.

To explain:

The contingent liability with examples

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Chapter 15 Homework 13 Saved Help Save & Exit Submit Part 1 of 2 0.83 points eBook Ask Required information Use the following information to answer questions. (Algo) [The following information applies to the questions displayed below.] Information on Kwon Manufacturing's activities for its first month of operations follows: a. Purchased $100,800 of raw materials on credit. b. Materials requisitions show the following materials used for the month. Job 201 Job 202 Total direct materials Indirect materials Total materials used $ 49,000 24,400 73,400 9,420 $ 82,820 c. Time tickets show the following labor used for the month. Print References Job 201 $ 40,000 Job 202 13,400 Total direct labor 53,400 25,000 $ 78,400 Indirect labor Total labor used d. Applied overhead to Job 201 and to Job 202 using a predetermined overhead rate of 80% of direct materials cost. e. Transferred Job 201 to Finished Goods Inventory. f. Sold Job 201 for $166,160 on credit. g. Incurred the following actual other…

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Anti-Pandemic Pharma Co. Ltd. reports the following information in its income statement: Sales = $5,250,000; Costs = $2, 173,000; Other expenses = $187,400; Depreciation expense = $79,000; Interest expense= $53,555; Taxes $76,000; Dividends $69,000. $136,700 worth of new shares were also issued during the year and long-term debt worth $65,300 was redeemed. a) Compute the cash flow from assets b) Compute the net change in working capital (325 marks)

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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 11, Problem 13RQ

To determine

Contingent liability:

A contingent liability is not an actual liability but a potential liability which may or may not convert into an actual liability on the occurrence or non-occurrence of an event. The contingent liabilities which are probable and the amount can be reasonably estimated are recorded in the books of accounts. If the contingency is not probable of occurring or the amount cannot be ascertained, then it will not be recorded in the books but will be disclosed in the notes to the accounts.

To explain:

The contingent liability with examples

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Answer 3

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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 11, Problem 13RQ

To determine

Contingent liability:

A contingent liability is not an actual liability but a potential liability which may or may not convert into an actual liability on the occurrence or non-occurrence of an event. The contingent liabilities which are probable and the amount can be reasonably estimated are recorded in the books of accounts. If the contingency is not probable of occurring or the amount cannot be ascertained, then it will not be recorded in the books but will be disclosed in the notes to the accounts.

To explain:

The contingent liability with examples

Expert Solution & Answer

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Check out a sample textbook solution

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Answer 4

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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 11, Problem 13RQ

To determine