What is the correct answer in numbers 1 and 2? Show solution. 1.During 2021, Thor Company was sued by a competitor forP5,000,000 for infringement of a trademark.Based on the advice of the entity's legal counsel, the entityaccrued the sum of P3,000,000 as a provişion in the financialstatements for the year ended December 31, 2021:Subsequent to the end of the reporting period, on February15, 2022, the Supreme Court decided in favor of the partyalleging infringement of the trademark and ordered thedefendant to pay the aggrieved party a sum of P3,500,000.The financial statements were prepared by the entity'smanagement on January 31, 2022, and approved by the boardof directors on February 20, 2022.What amount of provision should have been accrued onDecember 31, 2021?5,000,000b.а.3,000,0003,500,000d.с.2.On November 5, 2021, a Dunn Company truck was in anaccident with an auto driven. by Bell. The entity receivednotice on January 12, 2022 of a lawsuit for P700,000 damagesfor personal injuries suffered by Bell.The entity's counsel believed it is probable that Bell will beawarded an estimated amount in the range between P200,000and P500,000. The possible outcomes are equally likely.The accounting year ends on December 31 and the 2021financial statements were issued on March 31, 2022.What amount of provision should be accrued on December31, 2021?а.b. 200,000c. 500,000d. 350,000100

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1. During 2021, Thor Company was sued by a competitor for P5,000,000 for infringement of a trademark. Based on the advice of the entity's legal counsel, the entity accrued the sum of P3,000,000 as a provision in the financial statements for the year ended December 31, 2021. Subsequent to the end of the reporting period, on February 15, 2022, the Supreme Court decided in favor of the party alleging infringement of the trademark and ordered the E D2 50 000

1. During 2021, Thor Company was sued by a competitor for P5,000,000 for infringement of a trademark. Based on the advice of the entity's legal counsel, the entity accrued the sum of P3,000,000 as a provision in the financial statements for the year ended December 31, 2021. Subsequent to the end of the reporting period, on February 15, 2022, the Supreme Court decided in favor of the party alleging infringement of the trademark and ordered the E D2 50 000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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