(Solved) What situation represents a contingent liability for a company?

What situation represents a contingent liability for a company?
A) A candy company's monthly production requires 1,000 kg of chocolate. The company entered into a contract with a chocolate producer to purchase 6,000 kg of chocolate over the next six months at the market price.
B) A bike company learned that a racer using its bike was seriously injured in an accident on December 30th, 2012, as the front wheel of the bike was released in a curb as a result of a manufacturing defect. The company has not received a claim at December 31st, 2012 but management expects to receive a claim.
C) A restaurant received a $10,000 claim from a customer for emotional damages as a result of poor service. The legal counsel of the restaurant indicated that the claim was not supported and there was less than a 5% chance that the restaurant would have to pay.
D) A hotel chain was found guilty by a judge for not refunding customers with on-line reservations. The hotel chain will have to pay $50,000 to various customers in the following year.

Home Search Q & A Board Gallery Resource Library Blog Dictionary Chat	Quick Links Start a Topic Latest Topics Unanswered Questions Courses Study Tools Browse by Textbook	Social Facebook YouTube Community Stats Who's Online Trending Staff	Help About Us Take the Tour Study Tips Posting Guidelines Terms and Policies Contact Us
Biology Forums - Study Force © 2010-2024 \| Powered by SMF \| SMF © 2015, Simple Machines \| Sitemap Biology-Forums.com is not affiliated with any publisher. Book covers, title and author names appear for reference only.

What situation represents a contingent liability for a company?

Auditing: The Art and Science of Assurance Engagements, Canadian Edition

Related Topics