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Delta Construction is under scrutiny for hiding liabilities. The balance sheet shows $2,500,000 in total liabilities, but an internal review indicates additional liabilities worth $700,000.

Delta Construction is under scrutiny for hiding liabilities. The balance sheet shows $2,500,000 in total liabilities, but an internal review indicates additional liabilities worth $700,000. Moreover, there are unrecorded contingent liabilities of $300,000.

Requirement: Calculate the true total liabilities and discuss the implications of not recording these liabilities accurately.


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