Question: Monsanto s 2012 annual report stated that the company s liabilities for

Monsanto’s 2012 annual report stated that the company’s liabilities for environmental remediation and litigation contingencies are $213 million as of 8/31/12 ($176 million as of 8/31/11).
a. Describe how the liabilities affected the basic accounting equation.
b. What accounting principle is being followed by Monsanto? Explain.
c. Assume $25 million was actually spent in 2012 to remediate environmental problems. Draw a T-account and reconstruct 2012 changes for contingencies.

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