Covert Buick Company is the only Buick dealer in Austin, Texas, and one of the largest Buick dealers in the southwestern United States. The dealership sells new and used cars and operates a body shop and a service department. Duke Covert, the general manager, is considering changing insurance companies because of a disagreement with Doug Stillwell, Austin agent for the Travelers Insurance Company. Travelers is doubling Covert's liability insurance cost for the next year. In discussing insurance coverage with you, a trusted business associate, Stillwell brings up the subject of contingent liabilities.

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Write a memorandum to inform Covert Buick Company of specific contingent liabilities arising from the business. In your discussion, define a contingent liability.

Computing and recording payroll amounts

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