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lyoming company file ompany seeking P2,0

lyoming company file ompany seeking P2,0

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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In march 2016, Wyoming company filed a suit against DC company seeking P2,000,000 damages for patent infringement. A court decision on November 2016 awarded Wyoming company P1,750,000 in damages. DC Company motioned to appeal the decision which was expected to be resolved within 2016. Wyoming company's counsel believed it is probable that it will be successful against DC company for an estimated amount ranging from P1,400,000 to P1,750,000 with P1,500,00 as the most likely amount. The income reported in the 2016 statement of profit or loss statement
Transcribed Image Text:In march 2016, Wyoming company filed a suit against DC company seeking P2,000,000 damages for patent infringement. A court decision on November 2016 awarded Wyoming company P1,750,000 in damages. DC Company motioned to appeal the decision which was expected to be resolved within 2016. Wyoming company's counsel believed it is probable that it will be successful against DC company for an estimated amount ranging from P1,400,000 to P1,750,000 with P1,500,00 as the most likely amount. The income reported in the 2016 statement of profit or loss statement
On December 12, 2016, an explosion in Vancouver Company's plant caused extensive damages to nearby properties. By march 1, 2016, claims have been asserted against Vancouver company. Vancouver company's management and their legal counsel concluded that it is probable that Vancouver company would be liable for damages estimated at P4,000,000. Vancouver company has a P6,000,000 comprehensive public liability insurance policy. This policy has a P500,000 deductible clause. What should be reported in the December 31, 2016 financial statements that were issued on March 25, 2017 in relation to the above- mentioned events?
Transcribed Image Text:On December 12, 2016, an explosion in Vancouver Company's plant caused extensive damages to nearby properties. By march 1, 2016, claims have been asserted against Vancouver company. Vancouver company's management and their legal counsel concluded that it is probable that Vancouver company would be liable for damages estimated at P4,000,000. Vancouver company has a P6,000,000 comprehensive public liability insurance policy. This policy has a P500,000 deductible clause. What should be reported in the December 31, 2016 financial statements that were issued on March 25, 2017 in relation to the above- mentioned events?
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