Accounting: Tools for Business Decision Making, 5th Edition

Published by Wiley
ISBN 10: 1118128168
ISBN 13: 978-1-11812-816-9

Chapter 10 - Reporting and Analyzing Liabilities - Exercises: E10-17

Answer

Step1: The cases are of general nature, a routine in the business of Wal-Mart. The losses if any will be recorded as business expenses. Step2: There will not be any material difference, even if the contingent liability is worked out and taken for calculation of ratios.

Work Step by Step

Step1: The contingent liability is to be worked out and reported, when it is an abnormal case, and the loss can be heavy looking to the size of the company. Step2: The financial statement analysis will not have any implications.
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