If a contingent liability is reasonably estimable and it is reasonably possible that the contingency will occur, the contingent liability Group of answer choices should be recorded in the accounts. should be disclosed in the notes accompanying the financial statements. should not be recorded or disclosed in the notes until the contingency actually happens. must be paid for the amount estimated.

Should be disclosed in the notes accompanying the financial statements

Explanation:

You have to report contingent liabilities that are reasonably possible to occur, but since they haven’t occurred, you don’t record or pay them until they actually occur. You report them in the notes only.

Investment is referred to as the process in which the person invests in any of the assets with the intention or the goal of generating income from the invested assets. It is the appreciation of the value of assets over a period of time.  

The Present Value of the investment is = $176,865

a) Data and Calculations:

PV (Present Value) $89,565

N (Number of Periods) 8.000

I/Y (Interest Rate) 7.000%

PMT (Periodic Receipts) $15,000.00

b) Calculation of Present Value of $15,000 with the annuity factor of 5.971 (7% interest for 8 years):

Present value of

= $89,565

c) Calculation of Present Value of $150,000 at the end of 8 years at 7% interest:

Present value of

d) Total present value of the investment:

Annuity Present value = $89,565

Present value of lump sum = $87,300

Total investment PV = $176,865

To know more about the calculation of the present value of the investment, refer to the link below:

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