During 2018, Josephine company was sued by a competitor for P1,500,000 for infringement of a patent. Based on the advice of the entity’s legal counsel, Josephine company accrued the sum of P900,000 as a provision in its financial statements for the year ended December 31, 2018. Subsequently, on March 15, 2019, the supreme court decided in favor of the party alleging infringement of the patent and ordered the defendant to pay the aggrieved party a sum of P1,050,000. The financial statements were prepared by the entity’s management on February 15, 2019 and approved by the board of directors on March 31, 2019. How much should be recognized as accrued liability on December 31, 2018? PLS provide solution and explanation for the answer above Philippines Accounting standard

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Question

#22
During 2018, Josephine company was sued by a competitor for P1,500,000 for infringement of a patent. Based on the advice
of the entity’s legal counsel, Josephine company accrued the sum of P900,000 as a provision in its financial statements for the
year ended December 31, 2018. Subsequently, on March 15, 2019, the supreme court decided in favor of the party alleging
infringement of the patent and ordered the defendant to pay the aggrieved party a sum of P1,050,000. The financial statements
were prepared by the entity’s management on February 15, 2019 and approved by the board of directors on March 31, 2019.
How much should be recognized as accrued liability on December 31, 2018?

PLS provide solution and explanation for the answer above

Philippines Accounting standard

 

Expert Solution
steps

Step by step

Solved in 2 steps

Blurred answer
Knowledge Booster
Accounting for Income Taxes
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education