On December 13, 2019, ABC Company was in an accident with an automobile driven by DEF. ABC received notice on December 31,2019 of a lawsuit for P600,000 damages for personal injuries suffered by DEF. ABC's counsel believes it is probable that DEF will be awarded an estimated amount in the range between P300,000 and P600,000 and that P 450,000 is a best estimate of potential liability. ABC's accounting year ends on December 31 and the 2019 financial statements were issued on March 2, 2020. On April 30,2020,before the financial statements were issued, ABC settled DEF for the amount of P 500,000. What amount of liability should ABC Company recognize at December 31, 20197? * O P 600,000 O P 300,000 O P 500,000 O P 450,000
On December 13, 2019, ABC Company was in an accident with an automobile driven by DEF. ABC received notice on December 31,2019 of a lawsuit for P600,000 damages for personal injuries suffered by DEF. ABC's counsel believes it is probable that DEF will be awarded an estimated amount in the range between P300,000 and P600,000 and that P 450,000 is a best estimate of potential liability. ABC's accounting year ends on December 31 and the 2019 financial statements were issued on March 2, 2020. On April 30,2020,before the financial statements were issued, ABC settled DEF for the amount of P 500,000. What amount of liability should ABC Company recognize at December 31, 20197? * O P 600,000 O P 300,000 O P 500,000 O P 450,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
p7
Transcribed Image Text:On December 13, 2019, ABC Company was in an accident with an automobile driven by DEF.
ABC received notice on December 31,2019 of a lawsuit for P600,000 damages for personal
injuries suffered by DEF. ABC's counsel believes it is probable that DEF will be awarded an
estimated amount in the range between P300,000 and P600,000 and that P 450,000 is a best
estimate of potential liability. ABC's accounting year ends on December 31 and the 2019
financial statements were issued on March 2, 2020. On April 30,2020,before the financial
statements were issued, ABC settled DEF for the amount of P 500,000.
What amount of liability should ABC Company recognize at December 31, 2019? *
O P 600,000
O P 300,000
O P 500,000
O P 450,000
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education