8. Refer to MC No. 6. Which ofthe following is correctregarding the litigation case onDecember 2019? *a. Even if the happening of the eventis remote, Buwis Buhay should stillexplain it in the notes as this canimpact its future financialperformance given the materialamount of P20,000,000.b. Whether an item is provision,contingent liability, or contingentO asset, it should only be disclosed inthe financial statements since theoccurrence is remote.c. Buwis Buhay should appeal thelitigation case the fact that theevidences presented are not strongenough to defeat the company.d. The event needs to be shown as adisclosure as showing remotenessof behavior. 6. Buwis Buhay Incorporatedhad several outstandingobligations on December 31,2019. The brief descriptionslisted below can be ascertainedfrom these liabilities.r.In June 2019, Buwis Buhay was involved in a court case amounting to P10,000,000. The attorneyassessed that it is probable that the company will win the case with P4,500,000 as the best estimateof the reward.• In August 2019, Baguio City brought an action against the company for polluting the surroundingrivers with its waste products costing P5,000,000. It is probable that Baguio City will be successfulbut the amount of damages Buwis Buhay might have to pay is not to exceed P2,500,000.• In December 2019, another litigation case amounting to P20,000,000 was filed against Buwis Buhayfor injuring pedestrians due to its renovation projects within the premise. This court case is seen tohave remote likelihood of occurrence because the evidences filed are not strong.

Liabilities that depend on the outcome of an uncertain event, must pass two criterions before they…

8. Refer to MC No. 6. Which of the following is correct regarding the litigation case on December 2019? * a. Even if the happening of the event is remote, Buwis Buhay should still explain it in the notes as this can impact its future financial performance given the material amount of P20,000,000. b. Whether an item is provision, contingent liability, or contingent asset, it should only be disclosed in the financial statements since the occurrence is remote. c. Buwis Buhay should appeal the litigation case the fact that the evidences presented are not strong enough to defeat the company. d. The event needs to be shown as a disclosure as showing remoteness of behavior.

8. Refer to MC No. 6. Which of the following is correct regarding the litigation case on December 2019? * a. Even if the happening of the event is remote, Buwis Buhay should still explain it in the notes as this can impact its future financial performance given the material amount of P20,000,000. b. Whether an item is provision, contingent liability, or contingent asset, it should only be disclosed in the financial statements since the occurrence is remote. c. Buwis Buhay should appeal the litigation case the fact that the evidences presented are not strong enough to defeat the company. d. The event needs to be shown as a disclosure as showing remoteness of behavior.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter17: Advanced Issues In Revenue Recognition

Section: Chapter Questions

Problem 6P

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