Question: How should each of the following situations be reported in

How should each of the following situations be reported in the financial statements?
a. It has been determined that one of the company’s products has caused a safety hazard. It is considered probable that liabilities have been incurred and a reasonable estimate of the amount can be made.
b. A company warehouse is located in a section of the city that has routinely flooded in the past. Consequently the company can no longer find a source of insurance for the warehouse. No flood has yet occurred this year.
c. Because of newly passed legislation, a company will have to upgrade its facilities over the next two years. Significant expenditures will occur, but at this time the amount has not been determined.

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  • CreatedApril 20, 2015
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