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Demonstrate the adjustment required when the subsidiary has a contingent liability for damages disclosed, for which the fair value is determined to be $7,000. Explain

Demonstrate the adjustment required when the subsidiary has a contingent liability for damages disclosed, for which the fair value is determined to be $7,000. Explain in detail the journal entry, line by line. Then show how this would be posted in the consolidation worksheet, highlighting the effect the group's financial statements.

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