Treatment of Contingent Liabilities: Contingent liabilities are liabilities which may arise in future depending on the future event to happen. The treatment of contingent liability shall be made depending upon the type of contingent liability. There are three types of contingent liabilities: Remote Contingent liabilities: The Remote contingent liabilities are those which are not expected to arise in future and hence nor recorded in financial statement as liability and nor disclosed in the notes to account. Reasonably possible Contingent liabilities: These are such liabilities, the possibilities of arising is quite low and therefore, the not recorded as liabilities and but shown as foot note in financial statement. Probable Contingent liabilities: The Probable contingent liabilities are those contingent liabilities, the expectation of arising of whom are more than 50%. Therefore, the it will recorded as liabilities if the amount can be estimated with reasonable degree of accuracy and shall be disclosed in the notes to accounts if the amount cannot be estimated. Requirement1: The Treatment of liability form current law suit.

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Answer 1

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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 S11.12SE

To determine

Treatment of Contingent Liabilities:

Contingent liabilities are liabilities which may arise in future depending on the future event to happen. The treatment of contingent liability shall be made depending upon the type of contingent liability. There are three types of contingent liabilities:

Remote Contingent liabilities: The Remote contingent liabilities are those which are not expected to arise in future and hence nor recorded in financial statement as liability and nor disclosed in the notes to account.

Reasonably possible Contingent liabilities: These are such liabilities, the possibilities of arising is quite low and therefore, the not recorded as liabilities and but shown as foot note in financial statement.

Probable Contingent liabilities: The Probable contingent liabilities are those contingent liabilities, the expectation of arising of whom are more than 50%. Therefore, the it will recorded as liabilities if the amount can be estimated with reasonable degree of accuracy and shall be disclosed in the notes to accounts if the amount cannot be estimated.

Requirement1:

The Treatment of liability form current law suit.

To determine

Requirement2:

The Treatment of liability from the notice of being sued.

To determine

Requirement3:

The Treatment of liability arising from a case in which the business is a defendant.

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Star Company incurred and paid the following costs for research and development activities: Material used from inventory $ 60,000 Wages and salaries 85,000 Allocation of general and administrative costs 25,000 Depreciation on building housing multiple research and development activities 30,000 Machine purchased for research and development project that has no future alternative uses 35,000 Total $235,000 If Star includes all these costs in research and development expense, including the entire cost of the machine with no alternative future uses, which of the following would be included in the journal entry?

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Answer 2

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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 S11.12SE

To determine

Treatment of Contingent Liabilities:

Contingent liabilities are liabilities which may arise in future depending on the future event to happen. The treatment of contingent liability shall be made depending upon the type of contingent liability. There are three types of contingent liabilities:

Remote Contingent liabilities: The Remote contingent liabilities are those which are not expected to arise in future and hence nor recorded in financial statement as liability and nor disclosed in the notes to account.

Reasonably possible Contingent liabilities: These are such liabilities, the possibilities of arising is quite low and therefore, the not recorded as liabilities and but shown as foot note in financial statement.

Probable Contingent liabilities: The Probable contingent liabilities are those contingent liabilities, the expectation of arising of whom are more than 50%. Therefore, the it will recorded as liabilities if the amount can be estimated with reasonable degree of accuracy and shall be disclosed in the notes to accounts if the amount cannot be estimated.

Requirement1:

The Treatment of liability form current law suit.

To determine

Requirement2:

The Treatment of liability from the notice of being sued.

To determine

Requirement3:

The Treatment of liability arising from a case in which the business is a defendant.

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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 11, Problem S11.12SE

To determine

Treatment of Contingent Liabilities:

Contingent liabilities are liabilities which may arise in future depending on the future event to happen. The treatment of contingent liability shall be made depending upon the type of contingent liability. There are three types of contingent liabilities:

Remote Contingent liabilities: The Remote contingent liabilities are those which are not expected to arise in future and hence nor recorded in financial statement as liability and nor disclosed in the notes to account.

Reasonably possible Contingent liabilities: These are such liabilities, the possibilities of arising is quite low and therefore, the not recorded as liabilities and but shown as foot note in financial statement.

Probable Contingent liabilities: The Probable contingent liabilities are those contingent liabilities, the expectation of arising of whom are more than 50%. Therefore, the it will recorded as liabilities if the amount can be estimated with reasonable degree of accuracy and shall be disclosed in the notes to accounts if the amount cannot be estimated.

Requirement1:

The Treatment of liability form current law suit.

To determine

Requirement2:

The Treatment of liability from the notice of being sued.

To determine

Requirement3:

The Treatment of liability arising from a case in which the business is a defendant.

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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 11, Problem S11.12SE

To determine

Treatment of Contingent Liabilities:

Contingent liabilities are liabilities which may arise in future depending on the future event to happen. The treatment of contingent liability shall be made depending upon the type of contingent liability. There are three types of contingent liabilities:

Remote Contingent liabilities: The Remote contingent liabilities are those which are not expected to arise in future and hence nor recorded in financial statement as liability and nor disclosed in the notes to account.

Reasonably possible Contingent liabilities: These are such liabilities, the possibilities of arising is quite low and therefore, the not recorded as liabilities and but shown as foot note in financial statement.

Probable Contingent liabilities: The Probable contingent liabilities are those contingent liabilities, the expectation of arising of whom are more than 50%. Therefore, the it will recorded as liabilities if the amount can be estimated with reasonable degree of accuracy and shall be disclosed in the notes to accounts if the amount cannot be estimated.

Requirement1:

The Treatment of liability form current law suit.

To determine

Requirement2:

The Treatment of liability from the notice of being sued.

To determine

Requirement3:

The Treatment of liability arising from a case in which the business is a defendant.

Expert Solution & Answer

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Answer 5

Chapter 11, Problem S11.12SE

To determine

Treatment of Contingent Liabilities:

Contingent liabilities are liabilities which may arise in future depending on the future event to happen. The treatment of contingent liability shall be made depending upon the type of contingent liability. There are three types of contingent liabilities:

Remote Contingent liabilities: The Remote contingent liabilities are those which are not expected to arise in future and hence nor recorded in financial statement as liability and nor disclosed in the notes to account.

Reasonably possible Contingent liabilities: These are such liabilities, the possibilities of arising is quite low and therefore, the not recorded as liabilities and but shown as foot note in financial statement.

Probable Contingent liabilities: The Probable contingent liabilities are those contingent liabilities, the expectation of arising of whom are more than 50%. Therefore, the it will recorded as liabilities if the amount can be estimated with reasonable degree of accuracy and shall be disclosed in the notes to accounts if the amount cannot be estimated.

Requirement1:

The Treatment of liability form current law suit.

To determine

Requirement2:

The Treatment of liability from the notice of being sued.

To determine

Requirement3:

The Treatment of liability arising from a case in which the business is a defendant.

Answer 6

Chapter 11, Problem S11.12SE

To determine

Treatment of Contingent Liabilities:

Contingent liabilities are liabilities which may arise in future depending on the future event to happen. The treatment of contingent liability shall be made depending upon the type of contingent liability. There are three types of contingent liabilities:

Remote Contingent liabilities: The Remote contingent liabilities are those which are not expected to arise in future and hence nor recorded in financial statement as liability and nor disclosed in the notes to account.

Reasonably possible Contingent liabilities: These are such liabilities, the possibilities of arising is quite low and therefore, the not recorded as liabilities and but shown as foot note in financial statement.

Probable Contingent liabilities: The Probable contingent liabilities are those contingent liabilities, the expectation of arising of whom are more than 50%. Therefore, the it will recorded as liabilities if the amount can be estimated with reasonable degree of accuracy and shall be disclosed in the notes to accounts if the amount cannot be estimated.

Requirement1:

The Treatment of liability form current law suit.

Answer 7

Chapter 11, Problem S11.12SE

To determine

Treatment of Contingent Liabilities:

Contingent liabilities are liabilities which may arise in future depending on the future event to happen. The treatment of contingent liability shall be made depending upon the type of contingent liability. There are three types of contingent liabilities:

Remote Contingent liabilities: The Remote contingent liabilities are those which are not expected to arise in future and hence nor recorded in financial statement as liability and nor disclosed in the notes to account.

Reasonably possible Contingent liabilities: These are such liabilities, the possibilities of arising is quite low and therefore, the not recorded as liabilities and but shown as foot note in financial statement.

Probable Contingent liabilities: The Probable contingent liabilities are those contingent liabilities, the expectation of arising of whom are more than 50%. Therefore, the it will recorded as liabilities if the amount can be estimated with reasonable degree of accuracy and shall be disclosed in the notes to accounts if the amount cannot be estimated.

Requirement1:

The Treatment of liability form current law suit.

Answer 8

To determine

Requirement2:

The Treatment of liability from the notice of being sued.

Answer 9

To determine

Requirement2:

The Treatment of liability from the notice of being sued.

Answer 10

To determine

Requirement3:

The Treatment of liability arising from a case in which the business is a defendant.

Answer 11

To determine

Requirement3:

The Treatment of liability arising from a case in which the business is a defendant.

Answer 12

Expert Solution & Answer

Answer 13

Expert Solution & Answer

Answer 14

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Answer 15

Ch. 11 - Prob. 1QC Ch. 11 - On January 1, 2018, a business borrowed $18,000 on...Ch. 11 - Prob. 3QC Ch. 11 - Prob. 4QC Ch. 11 - Prob. 5QC Ch. 11 - Prob. 6QC Ch. 11 - Prob. 7QC Ch. 11 - Prob. 8QC Ch. 11 - Prob. 9QC Ch. 11 - McDaniel and Associates reported the following...

Concept explainers

Requirement2:

The Treatment of liability from the notice of being sued.

Requirement3:

The Treatment of liability arising from a case in which the business is a defendant.

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Chapter 11 Solutions

Concept explainers

Requirement2: The Treatment of liability from the notice of being sued.

Requirement3: The Treatment of liability arising from a case in which the business is a defendant.

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Chapter 11 Solutions

Requirement2:

The Treatment of liability from the notice of being sued.

Requirement3:

The Treatment of liability arising from a case in which the business is a defendant.