Question

Harrington Company was sued by an employee in late 2017. General counsel concluded that there was...

Harrington Company was sued by an employee in late 2017. General counsel concluded that there was an 80 percent probability that the company would lose the lawsuit. The range of possible loss is estimated to be $20,000 to $70,000, with no amount in the range more likely than any other. The lawsuit was settled in 2018, with Harrington making a payment of $60,000.

Assume that a U.S.–based company is issuing securities to foreign investors who require financial statements prepared in accordance with IFRS. Thus, adjustments to convert from U.S. GAAP to IFRS must be made. Ignore income taxes.

Required:

  1. Prepare journal entries for this lawsuit for the years ending December 31, 2017, and December 31, 2018, under (1) U.S. GAAP and (2) IFRS.

  2. Prepare the entry(ies) that Harrington would make on the December 31, 2017, and December 31, 2018, conversion worksheets to convert U.S. GAAP balances to IFRS.

0 0
Add a comment Improve this question Transcribed image text
Know the answer?
Add Answer to:
Harrington Company was sued by an employee in late 2017. General counsel concluded that there was...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
  • Trecek Corporation incurs research and development costs of $666,000 in 2017, 30 percent of which relate...

    Trecek Corporation incurs research and development costs of $666,000 in 2017, 30 percent of which relate to development activities subsequent to IAS 38 criteria having been met that indicate an intangible asset has been created. The newly developed product is brought to market in January 2018 and is expected to generate sales revenue for 10 years. Assume that a U.S.–based company is issuing securities to foreign investors who require financial statements prepared in accordance with IFRS. Thus, adjustments to convert...

  • Problem 11-28 (LO 11-9) Trecek Corporation incurs research and development costs of $612,000 in 2017, 30...

    Problem 11-28 (LO 11-9) Trecek Corporation incurs research and development costs of $612,000 in 2017, 30 percent of which relate to development activities subsequent to IAS 38 criteria having been met that indicate an intangible asset has been created. The newly developed product is brought to market in January 2018 and is expected to generate sales revenue for 10 years. Assume that a U.S.–based company is issuing securities to foreign investors who require financial statements prepared in accordance with IFRS....

  • Parnell Company acquired construction equipment on January 1, 2017, at a cost of $71,600. The equipment...

    Parnell Company acquired construction equipment on January 1, 2017, at a cost of $71,600. The equipment was expected to have a useful life of five years and a residual value of $12,000 and is being depreciated on a straight-line basis. On January 1, 2018, the equipment was appraised and determined to have a fair value of $66,700, a salvage value of $12,000, and a remaining useful life of four years. In measuring property, plant, and equipment subsequent to acquisition under...

  • Rawl Corporation sold a building to a bank at the beginning of 2017 at a gain...

    Rawl Corporation sold a building to a bank at the beginning of 2017 at a gain of $82,500 and immediately leased the building back for a period of four years. The lease is accounted for as an operating lease. The book value of building inet) is 5507000 Assume that a US-based company is issuing securities to foreign investors who require financial statements prepared in accordance with IFRS. Thus, adjustments to convert from US GAAP to IFRS must be made. Ignore...

  • CH11Question5 Parnell Company acquired construction equipment on January 1, 2017, at a cost of $72,000. The...

    CH11Question5 Parnell Company acquired construction equipment on January 1, 2017, at a cost of $72,000. The equipment was expected to have a useful life of four years and a residual value of $11,000 and is being depreciated on a straight-line basis. On January 1, 2018, the equipment was appraised and determined to have a fair value of $67,100, a salvage value of $11,000, and a remaining useful life of three years. In measuring property, plant, and equipment subsequent to acquisition...

  • Parnell Company acquired construction equipment on January 1, 2017, at a cost of $72,000. The equipment...

    Parnell Company acquired construction equipment on January 1, 2017, at a cost of $72,000. The equipment was expected to have a useful life of six years and a residual value of $15,000 and is being depreciated on a straight-line basis. On January 1, 2018, the equipment was appraised and determined to have a fair value of $65,100, a salvage value of $15,000, and a remaining useful life of five years. In measuring property, plant, and equipment subsequent to acquisition under...

  • Parnell Company acquired construction equipment on January 1, 2017, at a cost of $79,200. The equipment...

    Parnell Company acquired construction equipment on January 1, 2017, at a cost of $79,200. The equipment was expected to have a useful life of five years and a residual value of $13,000 and is being depreciated on a straight-line basis. On January 1, 2018, the equipment was appraised and determined to have a fair value of $75,700, a salvage value of $13,000, and a remaining useful life of four years. In measuring property, plant, and equipment subsequent to acquisition under...

  • Hirsch Company acquired equipment at the beginning of 2020 at a cost of $135,900. The equipment has a six-year life with no expected salvage value and is depreciated on a straight-line basis. At December 31, 2020, Hirsch compiled the following information

    Hirsch Company acquired equipment at the beginning of 2020 at a cost of $135,900. The equipment has a six-year life with no expected salvage value and is depreciated on a straight-line basis. At December 31, 2020, Hirsch compiled the following information related to this equipment: Expected future cash flows from use of the equipment$117,200Present value of expected future cash flows from use of the equipment102,400Fair value (selling price less costs to dispose)98,300 Assume that Hirsch Company is a U.S.-based company that is issuing...

  • Llungby AB spent 1,000,000 krone in 2017 on the development of a new product. The company...

    Llungby AB spent 1,000,000 krone in 2017 on the development of a new product. The company determined that 25 percent of this amount was incurred after the criteria in IAS 36 for capitalization as an intangible asset had been met. The newly developed product is brought to market in January 2018 and is expected to generate sales revenue for five years. Assume that a foreign company using IFRS is owned by a company using U.S. GAAP. Thus, IFRS balances must...

  • Sorocaba Ltda. sold a building to Banco Janeiro on January 1, 2017, for 201,000 reais and...

    Sorocaba Ltda. sold a building to Banco Janeiro on January 1, 2017, for 201,000 reais and then leased it back under a 10-year lease agreement, which is accounted for as an operating lease. The building had a carrying amount of 159,400 reais and a fair value of 201,000 reais on the date of sale. Assume that a foreign company using IFRS is owned by a company using U.S. GAAP. Thus, IFRS balances must be converted to U.S. GAAP to prepare...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT