During 2021, Marian Company was sued by a competitor for P5,000,000 for infringement of a patent. Based on the advice of the legal counsel, the entity accrued the sum of P3,000,000 as a provision in the financial statements for the year ended December 31, 2021. Subsequently, on March 15, 2022, 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 P3,500,000. The financial statements were prepared by the entity's management on February 15, 2022 and approved by the board of directors on March 31, 2022. What amount should be recognized as accrued liability on December 31, 2021? a. 5,000,000 b. 3,500,000 c. 3,000,000 d. 1,500,000

During 2021, Marian Company was sued by a competitor for P5,000,000 for infringement of a patent. Based on the advice of the legal counsel, the entity accrued the sum of P3,000,000 as a provision in the financial statements for the year ended December 31, 2021. Subsequently, on March 15, 2022, 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 P3,500,000. The financial statements were prepared by the entity's management on February 15, 2022 and approved by the board of directors on March 31, 2022. What amount should be recognized as accrued liability on December 31, 2021? a. 5,000,000 b. 3,500,000 c. 3,000,000 d. 1,500,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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