Chapter 11, Problem 14RQ

To determine

Contingent liability:

A contingent liability is capable of becoming an actual liability on the occurrence or non-occurrence of an event. A contingent liability is recorded in the books when it is probable or most likely to happen and the amount associated with the liability can be reasonably ascertained, else it is disclosed in the notes to the financial statement.

To determine:

The reporting of the given situation by the company