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collection. Round amounts to the nearest dollar. 3.29 (L0 7,9) (Contingencies and Commitments) Four independent situations follow. Situation 1: During 2020, Sugarpost Inc. became involved
collection. Round amounts to the nearest dollar. 3.29 (L0 7,9) (Contingencies and Commitments) Four independent situations follow. Situation 1: During 2020, Sugarpost Inc. became involved in a tax dispute with the Canada Rev- enue Agency. Sugarpost's tax lawyers have told management that Sugarpost will likely lose this dispute. They also believe that Sugarpost will have to pay the Receiver General for Canada between $900,000 and $1.4 million. After the 2020 financial statements were issued, the case was settled with the Canada Revenue Agency for $1.2 million. structions What amount, if any, should be reported as a liability for this contingency as at December 31, 2020, as- uming that Sugarpost follows ASPE? Situation 2: Toward the end of Su Li Corp's 2020 fiscal year, employer-union talks broke off, with the wage rates for the upcoming two years still unresolved. Just before the new year, however, a contract was signed that gave employees a 5% increase in their hourly wage effective January 1, 2021. Su Li had spent $1.2 million in wages on this group of workers in 2020
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