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Dwayne Company, a manufacturer of viagra has had a lawsuit filed against it by Vic Incorporated, another manufacturer of viagra. The suit alleges patent right PROBLEM 26-28 Contingencies infringements by Dwayne Company and asks for compensatory damages. For the following likely situations, determine how Dwayne Company shoula report the information concerning the lawsuit. The choices are: a. Accrue and disclose b. Disclose only Accrue only d. Neither accrue nor disclose C. 000,000,S Assume the following independent cases: 1. Dwayne Company's legal counsel estimates that the infringement case may result in a loss of P2,000,000 but considers the likelihood of losing the case as remote. 2. Dwayne Company's legal counsel is convinced that the likelihood of losing the case is probable, the potential amount of the loss is estimated to be no P2,300,000. 3. Dwayne Company's legal counsel estimates that the infringement case may result in a loss of P2,400,000 but considers the likelihood of losing the case as reasonably possible. 4. Dwayne Company's legal counsel is convinced that the likelihood of losing the case is probable, the potential amount of the loss, however, is currently undeterminable. 5. Dwayne Company's legal counsel is convinced that the likelihood of losing the case is probable, the potential amount of the loss, based on reliable bas evidence would be as follows: 20% that the liability would be P1,600,000; 50% that the liability would be at P2,000,000; 30% that the liability would be P2,400,000 6. Dwayne Company's legal counsel is convinced that the likelihood of losing 0000 000 the case is probable, the potential amount of the loss, based on relnabie n evidence would be around P1,500,000 to P3,000,000. 1:25 ai obe InsTu

Dwayne Company, a manufacturer of viagra has had a lawsuit filed against it by Vic Incorporated, another manufacturer of viagra. The suit alleges patent right PROBLEM 26-28 Contingencies infringements by Dwayne Company and asks for compensatory damages. For the following likely situations, determine how Dwayne Company shoula report the information concerning the lawsuit. The choices are: a. Accrue and disclose b. Disclose only Accrue only d. Neither accrue nor disclose C. 000,000,S Assume the following independent cases: 1. Dwayne Company's legal counsel estimates that the infringement case may result in a loss of P2,000,000 but considers the likelihood of losing the case as remote. 2. Dwayne Company's legal counsel is convinced that the likelihood of losing the case is probable, the potential amount of the loss is estimated to be no P2,300,000. 3. Dwayne Company's legal counsel estimates that the infringement case may result in a loss of P2,400,000 but considers the likelihood of losing the case as reasonably possible. 4. Dwayne Company's legal counsel is convinced that the likelihood of losing the case is probable, the potential amount of the loss, however, is currently undeterminable. 5. Dwayne Company's legal counsel is convinced that the likelihood of losing the case is probable, the potential amount of the loss, based on reliable bas evidence would be as follows: 20% that the liability would be P1,600,000; 50% that the liability would be at P2,000,000; 30% that the liability would be P2,400,000 6. Dwayne Company's legal counsel is convinced that the likelihood of losing 0000 000 the case is probable, the potential amount of the loss, based on relnabie n evidence would be around P1,500,000 to P3,000,000. 1:25 ai obe InsTu

FINANCIAL ACCOUNTING
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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Dwayne Company, a manufacturer of viagra has had a lawsuit filed against it by Vic Incorporated, another manufacturer of viagra. The suit alleges patent right PROBLEM 26-28 Contingencies infringements by Dwayne Company and asks for compensatory damages. For the following likely situations, determine how Dwayne Company should report the information concerning the lawsuit. The choices are: a. Accrue and disclose b. Disclose only Accrue only d. Neither accrue nor disclose combrere 1000 iM 000,000,S9 С. 000 Assume the following independent cases: 1. Dwayne Company's legal counsel estimates that the infringement case may result in a loss of P2,000,000 but considers the likelihood of losing the case as remote. 2. Dwayne Company's legal counsel is convinced that the likelihood of losing the case is probable, the potential amount of the loss is estimated to be no P2,300,000. 3. Dwayne Company's legal counsel estimates that the infringement case may bad result in a loss of P2,400,000 but considers the likelihood of losing the case lo as reasonably possible. re 4. Dwayne Company's legal counsel is convinced that the likelihood of losing the case is probable, the potential amount of the loss, however, is currently undeterminable. 5. Dwayne Company's legal counsel is convinced that the likelihood of losing the case is probable, the potential amount of the loss, based on reliable bas evidence would be as follows: 20% that the liability would be P1,600,000, 50% that the liability would be at P2,000,000; 30% that the liability would be P2,400,000 6. Dwayne Company's legal counsel is convinced that the likelihood of losing 000 the case is probable, the potential amount of the loss, based on rellabe evidence would be around P1,500,000 to P3,000,000. 291 1:2.5 ai ober insm IT pe lo 2A basmob no sldsys
Transcribed Image Text:Dwayne Company, a manufacturer of viagra has had a lawsuit filed against it by Vic Incorporated, another manufacturer of viagra. The suit alleges patent right PROBLEM 26-28 Contingencies infringements by Dwayne Company and asks for compensatory damages. For the following likely situations, determine how Dwayne Company should report the information concerning the lawsuit. The choices are: a. Accrue and disclose b. Disclose only Accrue only d. Neither accrue nor disclose combrere 1000 iM 000,000,S9 С. 000 Assume the following independent cases: 1. Dwayne Company's legal counsel estimates that the infringement case may result in a loss of P2,000,000 but considers the likelihood of losing the case as remote. 2. Dwayne Company's legal counsel is convinced that the likelihood of losing the case is probable, the potential amount of the loss is estimated to be no P2,300,000. 3. Dwayne Company's legal counsel estimates that the infringement case may bad result in a loss of P2,400,000 but considers the likelihood of losing the case lo as reasonably possible. re 4. Dwayne Company's legal counsel is convinced that the likelihood of losing the case is probable, the potential amount of the loss, however, is currently undeterminable. 5. Dwayne Company's legal counsel is convinced that the likelihood of losing the case is probable, the potential amount of the loss, based on reliable bas evidence would be as follows: 20% that the liability would be P1,600,000, 50% that the liability would be at P2,000,000; 30% that the liability would be P2,400,000 6. Dwayne Company's legal counsel is convinced that the likelihood of losing 000 the case is probable, the potential amount of the loss, based on rellabe evidence would be around P1,500,000 to P3,000,000. 291 1:2.5 ai ober insm IT pe lo 2A basmob no sldsys
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