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?
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?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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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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