Current Attempt in Progress Sandhill's Auto has several minor lawsuits outstanding. To determine the amount of liability to recognize on the December 31, 2022, statement of financial position, Sandhill's Auto decides to use expected cash flow techniques. Based on discussions with the company's lawyers, Sandhill's Auto estimates the expected cash outflows associated with the lawsuits at the end of each year, as shown below. Cash Flow x Estimate Probability Assessment = Expected Cash Flow 2023 $3,800 20% $760 6,400 50% 3,200 7,300 30% 2,190 Total $6,150

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Current Attempt in Progress
Sandhill's Auto has several minor lawsuits outstanding. To determine the amount of liability to recognize on the December 31, 2022,
statement of financial position, Sandhill's Auto decides to use expected cash flow techniques.
Based on discussions with the company's lawyers, Sandhill's Auto estimates the expected cash outflows associated with the lawsuits at
the end of each year, as shown below.
Cash Flow
x
Estimate
Probability
Assessment
=
Expected
Cash Flow
2023
$3,800
20%
$760
6,400
50%
3,200
7,300
30%
2,190
Total
$6,150
Transcribed Image Text:Current Attempt in Progress Sandhill's Auto has several minor lawsuits outstanding. To determine the amount of liability to recognize on the December 31, 2022, statement of financial position, Sandhill's Auto decides to use expected cash flow techniques. Based on discussions with the company's lawyers, Sandhill's Auto estimates the expected cash outflows associated with the lawsuits at the end of each year, as shown below. Cash Flow x Estimate Probability Assessment = Expected Cash Flow 2023 $3,800 20% $760 6,400 50% 3,200 7,300 30% 2,190 Total $6,150
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