On December 15, 2023, an employee filed a lawsuit against Bojack Company fordamages suffered when one of Bojack's equipment malfunctioned in August of2023. The legal counsel of the company believes that it is probable that Bojackwill pay the following damages:ProbabilityEstimated Litigation Cost50%P400,00030%700,00020%550,000Bojack Company provided a 10% risk adjustment factor.Using the expected value method, how much is the provision that should berecognized by Bojack Company on December 31, 2023?O 572,000O 1,650,000O 1,815,000O 520,000

In this Question, we have to find out the provision that should be recognized by the company. As…

On December 15, 2023, an employee filed a lawsuit against Bojack Company fo amages suffered when one of Bojack's equipment malfunctioned in August of 023. The legal counsel of the company believes that it is probable that Bojack vill pay the following damages:

On December 15, 2023, an employee filed a lawsuit against Bojack Company fo amages suffered when one of Bojack's equipment malfunctioned in August of 023. The legal counsel of the company believes that it is probable that Bojack vill pay the following damages:

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

On November 5, 2019, a Muntinlupa Company truck was in an accident with an auto driven by Murcia. Muntinlupa received notice on January 15, 2020 of a lawsuit for P900,000 damages for personal injuries suffered by Murcia. Muntinlupa's counsel believed it is probable that Murcia will be awarded an estimated amount in the range between P500,000 and P800,000, and each amount in the range is as likely as any other. The 2019 fınancial statements were issued on March 31, 2020. WWhat amount of provision should Muntinlupa accrue on December 31, 2019? O 500,000 O 650,000 O 900,000
It is now December 31, 2020 (t = 0), and a jury just found in favor of a woman who sued the city for injuries sustained in a January 2019 accident. She requested recovery of lost wages plus $300,000 for pain and suffering plus $60,000 for legal expenses. Her doctor testified that she has been unable to work since the accident and that she will not be able to work in the future. She is now 62, and the jury decided that she would have worked for another 3 years. She was scheduled have earned $32,000 in 2019. (To simplify this problem, assume that the entire annual salary amount would have been received on December 31, 2019.) Her employer testified that she probably would have received raises of 3% per year. The actual payment for the Jury award will be made on December 31, 2021. The judge stipulated that all dollar amounts are to be adjusted to a present value basis on December 31, 2021, using a 5% annual interest rate and using compound, not simple, Interest. Furthermore, he stipulated…
Matthew's retail store was condemned by the state. The retail store had a basis of $452000 and a FMV of $482500. The state awarded Matthew $605000, which he used to purchase a qualified replacement property for $527100 within the replacement time period. Calculate the basis in there placement property for the involuntary conversion. A)$452000 B) $527100 C)$605000 D) $482500
s
Stan sold goods to Bill in good faith, believing him to be a principal. Bill in fact was acting as agent for Nancy and was within the scope of his authority. The goods were charged to Bill, and on his refusal to pay, Stan sued Bill for the purchase price. While this action was pending, Stan learned of Bill’s relationship with Nancy. Nevertheless, thirty days after learning of that relationship, Stan obtained judgment against Bill and had an execution issued that was never satisfied. Three months after rendition of the judgment, Stan sued Nancy for the purchase price of the goods. Is Nancy liable? Explain.
p7
In the U.S. courts, those seeking to be compensated for damages due to environmental pollution must demonstrate that the emissions at issue caused the damages that are 1) presented. 2) demonstrate that the emissions at issue came from the specific defendant. 3) file an action within a specified period of time (typically 2-3 years). 4) all of the above.
The insured owns a personal umbrella liability insurance policy that has been in effect for more than 5 years. The insurance company will be able to nonrenew the policy for all of the reasons indicated below except The insured was convicted of a misdemeanor The insured’s producer had its agency contract terminated by the insurance company The primary automobile insurer is not A-rated for financial solvency The insured’s home was damaged due to weather related losses only
Faramarzinikpey Company, a public company, is preparing its annual financial statements on December 31, 2022. The following selected information is available: The company has been sued by an employee for discrimination. The employee is seeking $5,000,000 in damages. Legal counsel believes it is unlikely that the company will have to pay any damages. The amount is material ( substantial ) to the company. Employees have accrued ( earned ) $4,200 in vacation pay benefits as of December 31,2022. The company has been sued in a $ 3,000,000 product liability lawsuit. Legal counsel believes the company will probably have to pay the full amount. On October 1, 2022, the company signed a $ 10,000, 6-month, 8% note payable. No interest has been accrued to date. Instructions: Prepare any necessary adjusting entries or disclosures on December 31, 2022.
2. On November 5, 2021, a DEF Corporation's truck was in an accident with an auto driven by Mr. Dela Cruz. DEF received notice on January 12, 2022 of a lawsuit for P700,000 damages for personal injuries suffered by Mr. Dela Cruz. DEF Corporation's counsel believes it is probable that Mr. Dela Cruz will be awarded an estimated amount in the range between P200,000 and P450,000, and that P300,000 is a better estimate of potential liability than any other amount. DEF's accounting period ends on December 31, and the 2021 financial statements were issued on March 2, 2022. What amount of loss should DEF accrue at December 31, 2021?
West Chester University is being sued for $1,000,000 by Mr. Durstin. Mr. Durstin is claiming he was severely injured on June 21, 2019 when he slipped on the snow and ice that had not been properly shoveled off of the pavement in front of Anderson Hall. As of June 30, 2019, the last day of West Chester University's fiscal year, Mr. Durstin's lawsuit had not yet gone to trial. Which of the following is CORRECT concerning the impact of the contingent liability from Mr. Durstin's lawsuit on West Chester University's June, 30, 2019 financial statements? Multiple Choice Ignore the lawsuit. No impact on the financial statements or Disclosure in the Notes Record the $1,000,000 as a Loss on the 2019 Income Statement Present the $1,00,000 as a Loss on the Income Statement and a Liability on the Balance Sheet; and required Disclosure in the Notes
P incurs $8,000 of damages because of D's negligent handling of radioactive waste. The administrative costs of a trial would be $3,000 (all costs, for all parties and court). Which of the following statements is true? Assume a trial would give us the "correct" damage award. P's legal fees would be $1,000. O Social costs would be zero if P dropped the lawsuit against D. O P's threat value is $8.000 O Litigating this matter is inefficient unless the error costs are $3,000 or more. O Litigating this matter is inefficient because the costs definitely outweigh the benefit.