Contingent Liabilities

Homework Assignment 9 – Fall 2021
Contingent Liabilities

You need to record your answers in the HW 9 item in Canvas. I recommend watching the videos related to Chap 17 -contingent liabilities before beginning this assignment.

Use chapter 17 notes and FASB Accounting Standards Codification 450-20-30-1 to assist you in answering the questions below. 450-20-30-1 is providing further guidance on how to measure (i.e. determine the value) of a loss contingency if you have determined that the GAAP criteria for recording an amount has been met.

Copy and paste the link (sometimes clicking directly on it does not always work).
Also type in the username and password as sometimes copying it does not always work.

http://www2.aaahq.org/ascLogin.cfm

• Username – AAA51500
• Password – 2HsuC8x
• Choose FASB Accounting Standards Codification
• Go to the liabilities section and find 450-20-30-1

Answer questions 1 -2 using Court Case #1

Question 1
Q1. For the year-ending December 31, 2016 (for Orange), what should be the balance in the accrued liability account related to this court case?

Group of answer choices
0
15 million
22 million
25 million
35 million

Question 2
Q2. For the year-ending December 31, 2018 (for Orange), what should be the balance in the accrued liability account related to this court case?

Group of answer choices
0
15 million
22 million
25 million
31 million
35 million

Answer question 3-4 using Court Case #2

Question 3
Q3. For the year-ending December 31, 2018 (for Green), what should be the balance in the accrued liability account related to this court case?

Group of answer choices
0
37 million
47.5 million
58 million

Q4. For the year-ending December 31, 2019 (for Green), what journal entry is necessary related to this court case? (assume that no new journal entries have been made related to this case in 2019 and assume that the balance was properly recorded for the year ending 12/31/2018).
You will answer this through the questions below.

Question 4
Q4a. What account (name) is debited?
•

Question 5
Q4b. What account (name) is credited?
•

Question 6
Q4c. What amount is debited/credit? (same amount is being debited/credit). Enter a number with all the appropriate zero’s.
•

Question 7
Q5. For the year-ending December 31, 2020 (for Spears), what should be the balance in the accrued liability account related to this court case?

Group of answer choices
0
1 million