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“Financial Accounting II (MGT401)”

This is to inform that your 3rd Graded Discussion Board (GDB) will be opened according to the following schedule

 

GDB Schedule

Opening Date and Time

22nd  June, 2011 At 12:01 A.M. (Mid-Night)

Closing Date and Time

24th  June, 2011 At 11:59 P.M. (Mid-Night)

Topic/Area for Discussionn

Provisions, Contingent Assets & Contingent Liabilities

Note: The discussion question will be from the area/topic mentioned above.  So start learning about the topic now.

 

Guidelines for Preparation:

  1. For acquiring the relevant knowledge, do not rely only on handouts but watch the course video lectures, which can be downloaded for free fromwww.youtube.com/vu, and also use other reference books.

Important Instructions: 

  1. The GDB will remain open for 72 hours
  2. The GDB will open and close at above specified date and time. Please note that no grace day and extra time will be given for posting comments on GDB.
  3. You should post your answer on the Graded Discussion Board (GDB), not on the Moderated Discussion Board (MDB). Both will run parallel to each other during the time specified above.  Therefore, due care will be needed.
  4. You cannot participate in the discussion after the due date.
  5. Your answer should be relevant to the topic i.e. according to the topic, clear and concise.
  6. Do not copy or exchange your answer with other students.  Two identical / copied comments will be marked Zero (0) and may damage your grade in the course.
  7. Questions / queries related to the content of the GDB, which may be posted by the students on MDB or via e-mail, will not be replied till the due date of the GDB is over.
  8. For planning your semester activities in an organized manner, you are advised to view schedule of upcoming Assignments, Quizzes and GDB in the overview tab of the course website on VU-LMS.

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Replies to This Discussion

Please Discuss here about this GDB.Thanks

Abacus Shipment is a cargo company which is engaged in transportation of dry bulk and liquid cargoes globally. The management office of the company is located in Lahore and it is listed on the Lahore Stock Exchange since 1990.

 

In year 2010, Abacus lost an entire shipload of cargo worth Rs. 100 million on a voyage to Canada. This seems to be a big loss for the company but a fortunate thing that it was insured through an insurance policy from PACCS insurance company. According to the report of the surveyor, the amount is claimable with subjected to deductible clause (10% of the claim) in the insurance policy. Before end of year, Abacus received a letter about acceptance of claim covering 90% of total insurance policy with intimating that cheque is in the mail (means the cheque is issued but it is on its way to you by mail).

 

ABC freight forwarding company which handed over the shipment to Abacus filed a lawsuit of Rs. 100 million against it by claiming the lost of shipment with additional lawsuit of Rs. 4 million resulting from the delay. The “Appellate Tribunal” of legal counsel of shipping companies declared, “It is probable that Abacus Shipment would have to pay Rs. 100 million but it is also a remote possibility that it would have to pay further Rs. 4 million which is claimed by the ABC freight forwarding company as this loss is specifically excluded from the freight forwarding contract.”

 

Requirements

You are required to identify:

 

  1. At which amount Abacus Shipment would need to make a provision at year end towards the claim of ABC freight forwarding company?

Rs.                                                           

 

  1. At which amount Abacus Shipment would need to recognize a contingent asset at year end towards the claim by company itself against the PACCS insurance company?

Rs.                          

 

Note:

Be specific and provide only the amounts. Detailed information and definitions are not required.

 

Instructions:

 

Read the following instructions before giving your comments on GDB:

 

  1. Use the font style “Times New Roman” and font size “12”.
  2. Your answer should be relevant to the topic i.e. clear and concise.
  3. Do not copy or exchange your answer with other students.  Two identical / copied comments will be marked Zero (0) and may damage your grade in the course.
  4. Books, websites and other reading material may be consulted before posting your comments but copying or reproducing the text from books, websites and other reading materials is strictly prohibited. Such comments will be marked as Zero (0).
  5. Obnoxious or ignoble answer should be strictly avoided.
Mahapara, sawaal to sab ko pata hai, jawab post karain :P

Requirements

You are required to identify:

 

  1. At which amount Abacus Shipment would need to make a provision at year end towards the claim of ABC freight forwarding company?

              104 Million Rs.         1st Ans                             

 

  1. At which amount Abacus Shipment would need to recognize a contingent asset at year end towards the claim by company itself against the PACCS insurance company?

                  90 Million Rs.            2nd Ans

 

 

plz if any guise make better GDB plz post here 


 

A contingent asset is a possible asset that arises from past events and
whose existence will be confirmed only by the occurrence or nonoccurrence
of one or more uncertain future events not wholly within
the control of the entity.

 

A contingent liability is:
(a) A possible obligation that arises from past events and whose
existence will be confirmed only by the occurrence or nonoccurrence
of one or more uncertain future events not wholly
within the control of the entity; or
(b) A present obligation that arises from past events but is not
recognized because:
(i) It is not probable that an outflow of resources embodying
economic benefits or service potential will be required to
settle the obligation; or

 

30 and 31 lectures gdb

contingent liability ans (1) = 104 million  and

(2)  answer contingent asset = 90 million    

Thanks brother for the correct and complete ans AFTAB ALI
thanks brother :)

Dears fellows:

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