1. In May 20x6, Caso Co. filed suit against Wayne, Inc. seeking P1,900,000 damages for patent infringement. A court verdict in November 20x9 awarded Caso P1,5000,000 in damages, but Wayne's appeal is not expected to be decided before 2x10. Caso's counsel believes it is probable that Caso will be successful against Wayne for an estimated amount in the range between P800,000 and P1,100,000, with P1,000,000 considered the most likely amount. What amount should Caso record as income from the lawsuit in the year ended December 31, 20x9? a. 0 b. 800,000 c. 1,000,000 d. 1,500,000 (AICPA)

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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What is the correct answer in the problem below? Provide a computation and explanation.
1. In May 20x6, Caso Co. filed suit against Wayne, Inc.
seeking P1,900,000 damages for patent infringement. A
court verdict in November 20x9 awarded Caso
P1,5000,000 in damages, but Wayne's appeal is not
expected to be decided before 2x10. Caso's counsel
believes it is probable that Caso will be successful
against Wayne for an estimated amount in the range
between P800,000 and P1,100,000, with P1,000,000
considered the most likely amount. What amount should
Caso record as income from the lawsuit in the year
ended December 31, 20x9?
a. 0
b. 800,000
c. 1,000,000
d. 1,500,000
(AICPA)
Transcribed Image Text:1. In May 20x6, Caso Co. filed suit against Wayne, Inc. seeking P1,900,000 damages for patent infringement. A court verdict in November 20x9 awarded Caso P1,5000,000 in damages, but Wayne's appeal is not expected to be decided before 2x10. Caso's counsel believes it is probable that Caso will be successful against Wayne for an estimated amount in the range between P800,000 and P1,100,000, with P1,000,000 considered the most likely amount. What amount should Caso record as income from the lawsuit in the year ended December 31, 20x9? a. 0 b. 800,000 c. 1,000,000 d. 1,500,000 (AICPA)
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