Horngren's Accounting (11th Edition)
Horngren's Accounting (11th Edition)
11th Edition
ISBN: 9780133856781
Author: Tracie L. Miller-Nobles, Brenda L. Mattison, Ella Mae Matsumura
Publisher: PEARSON
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Chapter 11, Problem 1QC
To determine

Known Liabilities:

The Known Liabilities are those liabilities which has not been recorded in the book yet. However, these are foreseeing to occur in the near future. In such situations, it is to be taken care of whether the amount of such liabilities can be determined accurately or not.

When the amount can be determined with accuracy, then such liabilities shall be recorded as actual liability.When such liabilities are expected to arisebut the estimated amount cannot be determined with accuracy, then such liability shall be shown as a note to the financial statement.

Requirement:

TheTreatment of Known liabilities which can be estimated in the books.

Expert Solution & Answer
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Answer to Problem 1QC

Solution: Theestimated amount of known liabilitiesare reported on the balance sheet.

b. reported in the Balance sheet.

Explanation of Solution

The liabilities which are going to arise in the near future and the amount of which is going to be determined with accuracy shall be reported in the liabilities of the balance sheet.

For example, the workman compensation claim pending for dispute in the court and it is apparent from the proceedings that the compensation of $200,000 have to be borne by the firm, then while preparing the financial statement, the claim for workmen compensation shall be reported in the liabilities side of the balance sheet.

Conclusion

To conclude, it must be said that known liabilities arising in the near future and estimated amount ascertained shall be reported in the balance sheet as liabilities.

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Chapter 11 Solutions

Horngren's Accounting (11th Edition)

Ch. 11 - Prob. 1RQCh. 11 - Prob. 2RQCh. 11 - Prob. 3RQCh. 11 - Prob. 4RQCh. 11 - What do short-term notes payable represent?Ch. 11 - 6. Coltrane Company has a $5,000 note payable that...Ch. 11 - Prob. 7RQCh. 11 - Prob. 8RQCh. 11 - Prob. 9RQCh. 11 - Prob. 10RQCh. 11 - Prob. 11RQCh. 11 - Prob. 12RQCh. 11 - Prob. 13RQCh. 11 - Prob. 14RQCh. 11 - Prob. 15RQCh. 11 - Prob. S11.1SECh. 11 - Prob. S11.2SECh. 11 - Recording unearned revenue On June 1, Guitar...Ch. 11 - Accounting for a note payable On December 31,...Ch. 11 - Determining current portion of long-term note...Ch. 11 - Computing and journalizing an employee’s total pay...Ch. 11 - Computing payroll amounts considering FICA tax...Ch. 11 - Prob. S11.8SECh. 11 - Computing bonus payable On December 31, Peterson...Ch. 11 - Prob. S11.10SECh. 11 - Prob. S11.11SECh. 11 - Prob. S11.12SECh. 11 - Prob. S11.13SECh. 11 - Prob. E11.14ECh. 11 - Prob. E11.15ECh. 11 - Prob. E11.16ECh. 11 - Prob. E11.17ECh. 11 - Prob. E11.18ECh. 11 - Prob. E11.19ECh. 11 - Prob. E11.20ECh. 11 - Prob. E11.21ECh. 11 - Prob. E11.22ECh. 11 - Prob. E11.23ECh. 11 - Prob. E11.24ECh. 11 - Journalizing and posting liabilities The general...Ch. 11 - Computing and journalizing payroll amounts Lee...Ch. 11 - Prob. P11.27APGACh. 11 - Journalizing liability transactions The following...Ch. 11 - Computing times-interest-earned ratio The income...Ch. 11 - Journalizing and posting liabilities The general...Ch. 11 - Prob. P11.31BPGBCh. 11 - Prob. P11.32BPGBCh. 11 - Prob. P11.33BPGBCh. 11 - Prob. P11.34BPGBCh. 11 - Prob. P11.35CPCh. 11 - Prob. 11.1DCCh. 11 - Prob. 11.2DCCh. 11 - Ethical Issue 11-1 Many small businesses have to...Ch. 11 - > Financial Statement Case 11-1 Details about a...
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