What amount should karen company report

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Question - During 2018, Karen Company guaranteed a supplier's P500,000 loan from a bank. On October l, 2018, Karen Company was notified that the supplier had defaulted on the loan and filed for bankruptcy protection. Counsel believes Karen Company probably have to pay between P250,000 and P450,000 under its guarantee. Asa result of the supplier's bankruptcy, Karen Company entered into a contract in December 2010 to retool its machines so that Karen Company could accept parts front other suppliers. Retooling costs are estimated to be P300, 000. What amount should Karen Company report as in its December 31, 2018, statement of financial position?

Reference no: EM132780303

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