Chapter 8, Problem 8.14E

1

To determine

Contingent Liability

Contingent liability is one form of liability that arises based on a particular outcome of a specific event. They are possible obligation that might arise or might not arise based on the future events. It is otherwise called as probable liability or eventual liability.

To describe: Whether excerpt describes contingent liability.

2

To determine

To Provide: Conditions that would record such a contingency.

3

To determine

To Provide: journal entry to record the  $381 million.