$(!)$

Required information

Exercise $8-17($Static$)$ Analyze disclosure of contingent liabilities $($LO$8-5)$

$[$The following information applies to the questions displayed below.$]$

Dow Chemical Company provides chemical, plastic, and agricultural products and services to various consumer markets. The following excerpt is taken from the disclosure notes of Dow's annual report.

DOW CHEMICAL

Notes to the Financial Statements $($excerpt$)$

Dow Chemical had accrued obligations of $$381$ million for environmental remediation and restoration costs, including $$40$ million for the remediation of Superfund sites. This is management's best estimate of the costs for remediation and restoration with respect to environmental matters for which the Company has accrued liabilities, although the ultimate cost with respect to these particular matters could range up to twice that amount. Inherent uncertainties exist in these estimates primarily due to unknown conditions, changing governmental regulations and legal standards regarding liability, and evolving technologies for handling site remediation and restoration.

Exercise $8-17($Static$)$ Part $1$

Exercise $8-17($Static$)$ Part $1$

Required:

Does the excerpt describe a contingent liability?

Yes or No

Under what conditions$-$would Dow record such a contingency?

Multiple Choice

Part $2$ of $3$

Multiple Choice

$1\mathrm{.}5$

points

Event is probable and amount can be reasonably estimated.

Event is possible and amount can be reasonably estimated.

Event is probable but amount cannot be reasonably estimated.

Event is possible but amount cannot be reasonably estimated.

How did Dow record the $$381$ million? $($If no entry is required for a particular transaction$/$event$,$ select $"$No Journal Entry Required" in the first account field. Enter your answers in dollars, not in millions. $($i$.$e$.5$ should be entered as $5,000,000).)$

Part $3$ of $3$

$1\mathrm{.}5$

points

Journal entry worksheet

$$

$(5,000,000).)q,$

References

Record the contingent liability if needed.

Note: Enter debits before credits

$\backslash$table$[[$Transaction$,$General Journal,Debit,Credit$],[1,,,],[,,,],[,,,],[,,,],[,,,],[,,,]]$

$2/$Chapter $8$

$HE$

$(!)$

Required information

Exercise $8-17($Static$)$ Analyze disclosure of contingent liabilities $($LO$8-5)$

$[$The following information applies to the questions displayed below.$]$

Dow Chemical Company provides chemical, plastic, and agricultural products and services to various consumer markets. The following excerpt is taken from the disclosure notes of Dow's annual report.

DOW CHEMICAL

Notes to the Financial Statements $($excerpt$)$

Dow Chemical had accrued obligations of $$381$ million for environmental remediation and restoration costs, including $$40$ million for the remediation of Superfund sites. This is management's best estimate of the costs for remediation and restoration with respect to environmental matters for which the Company has accrued liabilities, although the ultimate cost with respect to these particular matters could range up to twice that amount. Inherent uncertainties exist in these estimates primarily due to unknown conditions, changing governmental regulations and legal standards regarding liability, and evolving technologies for handling site remediation and restoration.

Exercise $8-17($Static$)$ Part $1$

Exercise $8-17($Static$)$ Part $1$

Required:

Does the excerpt describe a contingent liability?

Yes or No

$$

$$

Under what conditions$-$would Dow record such a contingency?

Part $2$ of $3$

Multiple Choice

$1\mathrm{.}5$ points

Print References

Event is probable and amount can be reasonably estimated.

Event is possible and amount can be reasonably estimated.

Event is probable but amount cannot be reasonably estimated.

Event is possible but amount cannot be reasonably estimated.

$3.$ How did Dow record the $$381$ million? $($If no entry is required for a particular transaction$/$event$,$ select $"$No Journal Entry Required" in the first account field. Enter your answers in dollars, not in millions. $($i$.$e$.5$ should be entered as $5,000,000).)$

Part $3$ of $3$

$1\mathrm{.}5$

points

Print

References

Journal entry worksheet

$$ A $$

Record the contingent liability if needed.

Note: Enter debits before credits.

$\backslash$table$[[$Transaction$,$General Journal,Debit,Credit$],[1,,,],[,,,],[,,,],[,,,],[,,,],[,,,]]$