An entity is the defendant in a patent infringement lawsuit. The entity's lawyers believe there is a 30% chance that the court will dismiss the case and the entity will incur no outflow of economic benefits. However, if the court rules in favor of the claimant, the awyers believe that there is a 20% chance that the entity will be required to pay damages of P800,000 (the amount sought by the claimant) and an 80% chance that the entity will be required to pay damages of P400,000 (the amount that was recently awarded by the same judge in a similar case). Other outcomes are unlikely. The court is expected to rule in late December 20x2. There is no indication that the claimant will settle out of court. A 7% risk adjustment factor to the probability-weighted expected cash flows is considered appropriate to reflect the uncertainties in the cash low estimates. An appropriate discount rate is 10% per year. How much is the provision for lawsuit at December 31, 20x1? Select the correct response: 446,908 326,836 436,360

An entity is the defendant in a patent infringement lawsuit. The entity's lawyers believe there is a 30% chance that the court will dismiss the case and the entity will incur no outflow of economic benefits. However, if the court rules in favor of the claimant, the awyers believe that there is a 20% chance that the entity will be required to pay damages of P800,000 (the amount sought by the claimant) and an 80% chance that the entity will be required to pay damages of P400,000 (the amount that was recently awarded by the same judge in a similar case). Other outcomes are unlikely. The court is expected to rule in late December 20x2. There is no indication that the claimant will settle out of court. A 7% risk adjustment factor to the probability-weighted expected cash flows is considered appropriate to reflect the uncertainties in the cash low estimates. An appropriate discount rate is 10% per year. How much is the provision for lawsuit at December 31, 20x1? Select the correct response: 446,908 326,836 436,360

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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In 2022, Mao Li Corporation determined that a production machine used in its operations was impaired and an impairment loss of HK$110,000 was recognized. In 2023, the fair value of the asset increased by HK$170,000 due to an unexpected resurgence in demand for the products the machine was designed to produce. How would the gain due to increase in fair value be recognized in 2023 under IFRS? Group of answer choices IFRS allows the recognition of this impairment reversal as either income from continuing operations or as other comprehensive income, depending upon management's intent. IFRS permits the recognition of this impairment reversal as income from continuing operations. IFRS does not permit recognition of gains on reversal of previous impairment loss write-downs. IFRS permits the recognition of this impairment reversal as other comprehensive income.
An Omani company located in Muscat has a factory building that originally cost the company OMR 250,000. The current fair value of the factory building is OMR 450,000. The Manager would like to report the difference as a gain. The write-up would represent a violation of which accounting assumption or principle. ( 1 marks)
Aviation Systems is involved in a $10 million lawsuit filed against one of its suppliers, Electronic Innovators. The litigation is in final appeal, and legal counsel advises that it is probable that Aviation Systems will win the lawsuit and be awarded somewhere between $6 and $10 million. Which of the following statement is true? Multiple Choice A gain and an asset must be recorded for $10 million. A gain must be recorded for $10 million and an asset must be recorded for $6 million. A gain and an asset must be recorded for $6 million. A gain must be recorded for $6 million and an asset must be recorded for $10 million. Gain contingencies are not recorded.
ABC is a defendant in a breach of patent lawsuit. If the court rules in favor of the claimant, the lawyers believe that there is a 60 percent chance that the entity will be required to pay damages of P2 million (them amount sought by the claimant) and a 40 per cent chance that the entity will be required to pay damages of P1 million (the amount that was recently awarded by the same judge in a similar case). Other amounts of damages are unlikely. The court is expected to rule the following year (in late December 2023). There is no indication that the claimant will settle out of court. ABC's lawyers believe there is a probability of very slightly over 50% that ABC will successfully defend the case. A 7 percent risk adjustment factor to the cash flows is considered appropriate to reflect the uncertainties in the cash flow estimates. An appropriate discount rate is 10 percent per year.What amount of provision must be recorded from the lawsuit as of December 31, 2022?
Robust Company, Inc., acquired all the assets of Depleted Company, Inc. In addition, Robust assumed certain liabilities of Depleted. Robust agreed that it would be legally responsible for any judgment in a patent infringement claim being litigated against Depleted Company. Experts’ opinions indicated that the likelihood that a significant change and liability would result was remote (less than 10%). After a trial, the jury concluded that an illegal patent infringement had occurred, and it awarded the judgment of $5 million. Robust paid $5 million and deducted it as an ordinary and necessary business expense. Upon audit, the IRS classified the $5 million payment and treated it as a capital expenditure under IRC section 263. For discussion: How would you evaluate the positions taken by Robust Company, Inc., and by the IRS? Support your positions by using the tax code, regulations, IRS rulings, and/or case law.
In 2019, Zain Oil company was being sued for damages the seaside because its chemical material dropped to the sea. The settlement of which could threaten the financial stability of the company. The company decided to choose non-disclosure with the hope that its lawyer may win the case at court. - what kind of qualitative characteristics of useful financial information?
acc
Wizardry Corporation's purpose clause in its charter states, "To operate a home-cleaning service business." After a few years of successful operation, Wizardry is offered the challenge of landscaping a neighboring business. If Wizardry accepts the offer, it would be violating its charter under: O a. the estoppel theory. O b. the de facto doctrine. O c. the de jure doctrine. O d. the ultra vires doctrine.
Question 20. The amount of provisions that should be recognized at December 31, 2021 is?
2. Paris paid Cherry $333,333 on 12/31/2020 for the exclusive right to market a particular product using the Cherry Co name and logo in promotional material. The franchise follows the rules of Going Concern. Paris also spent $600,000 on 12/31/2020 in developing a new manufacturing process. Its application for a patent is submitted. Paris believes it will be successful What is the Net Impact on Net Income for the year ended 2021?
Answer questions 1 through 3

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