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

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter9: Current Liabilities And Contingent Obligations

Section: Chapter Questions

Problem 4C: Pending Damage Suit Disclosure On December 15, 2019, a truck driver for Cork Transfer Company...

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