PROBLEM 26-29 Contingencies urrod e ts PRODE 2021, Smith Company filed suit against West Company seeking damages Car patent infringement. In Smith's December 31, 2021 financial statements, how should this be reported? The choices are: 00 a. Accrue and disclose b. Disclose only Accrue onlyto emtin um lo yahtev sbives pim oqmil olanM 2'shaW L8OBIEW Se 31 MOL G C. d. Neither accrue nor disclose motau oRTE 01-2muimsig b bn Assume the following independent cases: 1. It is virtually certain that Smith would be successful against West for an estimated amount of P1,500,000. 2. It is probable that Smith would be successful against West for an estimated amount of P1,500,000. 3. It is probable that Smith would be successful against West for an estimated amount of P1,500,000. Before the financial statement was issued, Smith was awarded P1,000,000 and received full payment thereof. 4. It is probable that Smith would be successful against West for an estimated amount of P1,500,000. After the financial statement was issued, Smith was awarded P1,000,000 and received full payment thereof. 5. During the year 2021, Smith won a litigation award for P1,500,000 which was tripled to P4,500,000 to include punitive damages. The defendant, who financially stable, has appealed only the P3,000,000 punitive damages. Counsel is unable to estimate the outcome of this appeal. . It is reasonably possible that Smith would be successful against West for an estimated amount of P1,500,000. oa bas
PROBLEM 26-29 Contingencies urrod e ts PRODE 2021, Smith Company filed suit against West Company seeking damages Car patent infringement. In Smith's December 31, 2021 financial statements, how should this be reported? The choices are: 00 a. Accrue and disclose b. Disclose only Accrue onlyto emtin um lo yahtev sbives pim oqmil olanM 2'shaW L8OBIEW Se 31 MOL G C. d. Neither accrue nor disclose motau oRTE 01-2muimsig b bn Assume the following independent cases: 1. It is virtually certain that Smith would be successful against West for an estimated amount of P1,500,000. 2. It is probable that Smith would be successful against West for an estimated amount of P1,500,000. 3. It is probable that Smith would be successful against West for an estimated amount of P1,500,000. Before the financial statement was issued, Smith was awarded P1,000,000 and received full payment thereof. 4. It is probable that Smith would be successful against West for an estimated amount of P1,500,000. After the financial statement was issued, Smith was awarded P1,000,000 and received full payment thereof. 5. During the year 2021, Smith won a litigation award for P1,500,000 which was tripled to P4,500,000 to include punitive damages. The defendant, who financially stable, has appealed only the P3,000,000 punitive damages. Counsel is unable to estimate the outcome of this appeal. . It is reasonably possible that Smith would be successful against West for an estimated amount of P1,500,000. oa bas
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:PROBLEM 26-29 Contingencies a eurrod ed
how should this be reported? The choices are:
During 2021, Smith Company filed suit against West Company seeking damages
for patent infringement. In Smith's December 31, 2021 financial statements,
000 X129
Accrue and disclose
b. Disclose only
C. Accrue only
d. Neither accrue nor disclose moteo D o1
a.
enuines
EV sbive
pio uoqm olanM 2shaW
LBOBIEW Se 3I MOLA
Assume the following independent cases: bauoa bas
1. It is virtually certain that Smith would be successful against West for an
estimated amount of P1,500,000.
2. It is probable that Smith would be successful against West for an estimated
amount of P1,500,000.
3. It is probable that Smith would be successful against West for an estimated
amount of P1,500,000. Before the financial statement was issued, Smith was
awarded P1,000,000 and received full payment thereof.
4. It is probable that Smith would be successful against West for an estimated
amount of P1,500,000. After the financial statement was issued, Smith was
awarded P1,000,000 and received full payment thereof.
5. During the year 2021, Smith won a litigation award for P1,500,000 which
was tripled to P4,500,000 to include punitive damages. The defendant, who
is financially stable, has appealed only the P3,000,000 punitive damages.
Counsel is unable to estimate the outcome of this appeal.
0 It is reasonably possible that Smith would be successful against West for an
estimated amount of P1,500,000.
IlauM
WOLS
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