Mississippi Cruise Lines is a defendant in litigation involving a swimming accident on one of its three cruise ships. Required: 1. The likelihood of a payment occurring is probable, and the estimated amount is $1.24 million. 2. The likelihood of a payment occurring is probable, and the amount is estimated to be in the range of $1.04 to $1.24 million. 3. The likelihood of a payment occurring is reasonably possible, and the estimated amount is $1.24 million. 4. The likelihood of a payment occurring is remote, while the estimated potential amount is $1.24 million. Record the necessary entry for the scenarios given above. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field. Enter your answers in dollars, not in millions. For example, $5.5 million should be entered as 5,500,000.)

Mississippi Cruise Lines is a defendant in litigation involving a swimming accident on one of its three cruise ships. Required: 1. The likelihood of a payment occurring is probable, and the estimated amount is $1.24 million. 2. The likelihood of a payment occurring is probable, and the amount is estimated to be in the range of $1.04 to $1.24 million. 3. The likelihood of a payment occurring is reasonably possible, and the estimated amount is $1.24 million. 4. The likelihood of a payment occurring is remote, while the estimated potential amount is $1.24 million. Record the necessary entry for the scenarios given above. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field. Enter your answers in dollars, not in millions. For example, $5.5 million should be entered as 5,500,000.)

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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Concept explainers

Contingent Liabilities and Provisions

A contingent liability can be defined as a liability the occurrence of which is dependent upon the happening of an uncertain future event. It is generally recorded in the books only when the amount of liability can be reasonably estimated and the contingency is likely to occur shortly.

Question

Mississippi Cruise Lines is a defendant in litigation involving a swimming accident on one of its three cruise ships.
Required:
1. The likelihood of a payment occurring is probable, and the estimated amount is $1.24 million.
2. The likelihood of a payment occurring is probable, and the amount is estimated to be in the range of $1.04 to $1.24 million.
3. The likelihood of a payment occurring is reasonably possible, and the estimated amount is $1.24 million.
4. The likelihood of a payment occurring is remote, while the estimated potential amount is $1.24 million.
Record the necessary entry for the scenarios given above. (If no entry is required for a particular transaction/event, select "No
Journal Entry Required" in the first account field. Enter your answers in dollars, not in millions. For example, $5.5 million should
be entered as 5,500,000.)

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