Loss Contingencies On February 1, 2011, one of the huge storage tanks of Viking Manufacturing Company exploded. Windows in houses and other buildings within a one-mile radius of the explosion were...

1 answer below »
Loss Contingencies On February 1, 2011, one of the huge storage tanks of Viking Manufacturing
Company exploded. Windows in houses and other buildings within a one-mile radius of the explosion were severely damaged, and a number of people were injured. As of February 15, 2011 (when the December 31, 2010, financial statements were completed and sent to the publisher for printing and public distribution), no suits had been filed or claims asserted against the company as a consequence of the explosion. The company fully anticipates that suits will be filed and claims asserted for injuries and damages. Because the casualty was uninsured and the company considered at fault, Viking Manufacturing will have to cover the damages from its own resources. Discuss fully the accounting treatment and disclosures that should be accorded the casualty and related contingent losses in the financial statements dated December 31, 2010.
Answered Same DayDec 31, 2021

Solution

David answered on Dec 31 2021
31 Votes
Accounting
We have considered each of the situations independently to determine whether the same would
wa
ant for recognition in the books of accounts and whether the same would form part of
accounting records of the concern. The following are the specific answers to the same along
with their reason for recognition or non recognition
In the present case it can be seen that there has been an event as a result of which lot of
causalities had arisen. The company considers itself guilty for the same and expects that the
legal suites would be filed against...
SOLUTION.PDF

Answer To This Question Is Available To Download

Related Questions & Answers

More Questions »

Submit New Assignment

Copy and Paste Your Assignment Here