Maurice Tutor

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    Argosy University/ Phoniex University/
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    Oct-2001 - Nov-2016

Category > Accounting Posted 31 Jul 2017 My Price 5.00

Farley Motors, Inc

Farley Motors, Inc., a motorcycle manufacturer, included the following note (adapted) in its annual report:
Notes to Consolidated Financial Statements
7 Commitments and Contingencies (Adapted)
The Company self-insures its product liability losses in the United States up to $3,000,000.
Catastrophic coverage is maintained for individual claims in excess of $3,000,000 up to $25,000,000.
Requirements
1. Why are these contingent (versus actual) liabilities?
2. How can a contingent liability become an actual liability for Farley Motors? What are the limits to the company’s product liabilities in the United States?

Answers

Maurice Tutor
(5)
Status NEW Posted 31 Jul 2017 09:07 AM My Price 5.00

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