Discuss each of the following situations, indicating whether the situation is a loss contingency that should be recorded or disclosed in notes to the financial statements of Freedom Airlines If the situation is not a loss contingency, explain how (if at all) it should be reported in the company's financial statements (Assume that all dollar amounts are material ) Instructions a 1 Freedom estimates that $700,000 of its accounts receivable will prove to be uncollectible 2 The company's president is in poor health and has previously suffered two heart attacks 3 As with any airline, Freedom faces the risk that a future airplane crash could cause considerable loss 4 Freedom is being sued for $2 million for failing to adequately provide alternative service for passengers whose reservations were canceled as a result of the airline's overbooking certain flights This suit will not be resolved for a year or more b Make a general statement that summarizes management's ethical responsibility regarding reporting loss contingencies in its financial statements Discuss each of the following situations, indicating whether the situation is a loss contingency that should be recorded or disclosed in notes to the financial statements of Freedom Airlines If the situation is not a loss contingency, explain how (if at all) it should be reported in the company's financial statements (Assume that all dollar amounts are material ) Instructions a 1 Freedom estimates that $700,000 of its accounts receivable will prove to be uncollectible 2 The company's president is in poor health and has previously suffered two heart attacks 3 As with any airline, Freedom faces the risk that a future airplane crash could cause considerable loss 4 Freedom is being sued for $2 million for failing to adequately provide alternative service for passengers whose reservations were canceled as a result of the airline's overbooking certain flights This suit will not be resolved for a year or more b Make a general statement that summarizes management's ethical responsibility regarding reporting loss contingencies in its financial statements

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Discuss each of the following situations, indicating whether the situation is a loss contingency that should be recorded or disclosed in notes to the financial statements of Freedom Airlines  If the situation is not a loss contingency, explain how (if at all) it should be reported in the company's financial statements  (Assume that all dollar amounts are material ) Instructions a  1  Freedom estimates that $700,000 of its accounts receivable will prove to be uncollectible  2  The company's president is in poor health and has previously suffered two heart attacks  3  As with any airline, Freedom faces the risk that a future airplane crash could cause considerable loss  4  Freedom is being sued for $2 million for failing to adequately provide alternative service for passengers whose reservations were canceled as a result of the airline's overbooking certain flights  This suit will not be resolved for a year or more  b  Make a general statement that summarizes management's ethical responsibility regarding reporting loss contingencies in its financial statements  Discuss each of the following situations, indicating whether the situation is a loss contingency that should be recorded or disclosed in notes to the financial statements of Freedom Airlines  If the situation is not a loss contingency, explain how (if at all) it should be reported in the company's financial statements  (Assume that all dollar amounts are material ) Instructions a  1  Freedom estimates that $700,000 of its accounts receivable will prove to be uncollectible  2  The company's president is in poor health and has previously suffered two heart attacks  3  As with any airline, Freedom faces the risk that a future airplane crash could cause considerable loss  4  Freedom is being sued for $2 million for failing to adequately provide alternative service for passengers whose reservations were canceled as a result of the airline's overbooking certain flights  This suit will not be resolved for a year or more  b  Make a general statement that summarizes management's ethical responsibility regarding reporting loss contingencies in its financial statements

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Discuss each of the following situations, indicating whether the situation is a loss contingency that should be recorded or disclosed in notes to the financial

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