Monsanto's 2008 annual report stated that the company's liabilities for environmental remediation and litigation contingencies are $262 million as of 8/31/09 ($272 million as of 8/31/08).
a. Describe how the liabilities affected the basic accounting equation.
b. What accounting principle is being followed by Monsanto? Explain.
c. Assume $25 million was actually spent in 2009 to remediate environmental problems. Draw a T-account and reconstruct 2009 changes for contingencies.