Contingent Liabilities Those liabilities which depends on the occurrence of any event in the future due to happening of any event in past is known as contingent liabilities. These liabilities may occur or may not be. An example of contingent liability is the pending lawsuit against company which if goes against can damage the company very much. The reason for note on contingent liabilities for A Group.

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Please provide the accurate solution to this financial accounting question using valid calculations.

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 8, Problem 8.2.2C

To determine

Concept introduction:

Contingent LiabilitiesThose liabilities which depends on the occurrence of any event in the future due to happening of any event in past is known as contingent liabilities. These liabilities may occur or may not be. An example of contingent liability is the pending lawsuit against company which if goes against can damage the company very much.

The reason for note on contingent liabilities for A Group.

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Please provide the accurate solution to this financial accounting question using valid calculations.

Ethan Industries allocates manufacturing overhead based on machine hours. Each component should require 7 machine hours. According to the static budget Ethan expected to incur the following: 1. 420 machine hours per month (components * 7 machine hours per component). 2. $6,720 in variable manufacturing overhead costs. 3. $9,450 in fixed manufacturing overhead costs. During September Ethan actually used 385 machine hours to make 60 components and spent $5,880 in variable manufacturing costs and $9,500 in fixed manufacturing overhead costs. Ethan' standard variable manufacturing overhead allocation rate is ___.

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Answer 2

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 8, Problem 8.2.2C

To determine

Concept introduction:

Contingent LiabilitiesThose liabilities which depends on the occurrence of any event in the future due to happening of any event in past is known as contingent liabilities. These liabilities may occur or may not be. An example of contingent liability is the pending lawsuit against company which if goes against can damage the company very much.

The reason for note on contingent liabilities for A Group.

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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 8, Problem 8.2.2C

To determine

Concept introduction:

Contingent LiabilitiesThose liabilities which depends on the occurrence of any event in the future due to happening of any event in past is known as contingent liabilities. These liabilities may occur or may not be. An example of contingent liability is the pending lawsuit against company which if goes against can damage the company very much.

The reason for note on contingent liabilities for A Group.

Expert Solution & Answer

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See solution

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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 8, Problem 8.2.2C

To determine