ZuoTi.Pro
Question

5 points Save Answe A company has been sued for $100 million for producing and selling an unsafe product. Attorneys for the c
business   accounting   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

Ans. Option B. Disclose the existence of the lawsuit in a note without making a journal entry.

As this can not be predicted reasonably so there is no need to create journal entry/accrual, however there is a chance of loss (contingency), hence disclosure in a note is required.

0 0
Add a comment
Know the answer?
Add Answer to:
5 points Save Answe A company has been sued for $100 million for producing and selling...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

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

  • A customer has sued Smith & Sons for an injury sustained while shopping at a company outlet. The company’s management determined that it is possible that the customer will win the lawsuit and esti...

    A customer has sued Smith & Sons for an injury sustained while shopping at a company outlet. The company’s management determined that it is possible that the customer will win the lawsuit and estimated that the possible lawsuit award might be as high as $1,000,000. Smith & Sons should: Select one: Record a liability in the company’s financial statements. Record a liability and a loss in the company’s financial statements. Do not record a liability in the financial statements but...

  • 10A-4. SLIPPERYFEET SHOE Company has been sued by a customer who fell down while wearing a...

    10A-4. SLIPPERYFEET SHOE Company has been sued by a customer who fell down while wearing a pair of the company's product at the local ice rink. The lawsuit asks for $3,000,000 in unspecified damages. Required: show the appropriate journal entry and describe any footnote under the following three conditions. 1. SLIPPERYFEET's attorney thinks that the possibility of losing this case is remote since the customer was well-known to be accident prone. 2. SLIPPERYFEET's attorney thinks that it is reasonably possible...

  • 10A-4. SLIPPERYFEET SHOE Company has been sued by a customer who fell down while wearing a...

    10A-4. SLIPPERYFEET SHOE Company has been sued by a customer who fell down while wearing a pair of the company's product at the local ice rink. The lawsuit asks for $3,000,000 in unspecified damages. Required: show the appropriate journal entry and describe any footnote under the following three conditions. 1. SLIPPERYFEET's attorney thinks that the possibility of losing this case is remote since the customer was well-known to be accident prone. 2. SLIPPERYFEET's attorney thinks that it is reasonably possible...

  • 10A-4. SLIPPERYFEET SHOE Company has been sued by a customer who fell down while wearing a pair of the company's p...

    10A-4. SLIPPERYFEET SHOE Company has been sued by a customer who fell down while wearing a pair of the company's product at the local ice rink. The lawsuit asks for $3,000,000 in unspecified damages. Required: show the appropriate journal entry and describe any footnote under the following three conditions. 1. SLIPPERYFEET's attorney thinks that the possibility of losing this case is remote since the customer was well-known to be accident prone. 2. SLIPPERYFEET's attorney thinks that it is reasonably possible...

  • 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...

  • For internally developed intangible assets, research and development expenditures incurred by the firm in the development...

    For internally developed intangible assets, research and development expenditures incurred by the firm in the development of a patent are generally recorded as: A current period operating expense. An intangible asset which is amortized over its estimated useful life. An intangible asset which is amortized over 40 years. An intangible asset which is not amortized. Accumulated depletion is reported on the balance sheet as a liability since it normally has a credit balance income statement as an increase in revenue...

  • Presented below are a number of business transactions that occurred during the current year for Ebersole...

    Presented below are a number of business transactions that occurred during the current year for Ebersole Ltd. In each of the situations, discuss the appropriateness of the journal entries in terms of IFRS. (a) Merchandise inventory that cost £310,000 is reported on the balance sheet at £345,000, the expected selling price less estimated selling costs. The following entry was made to record this increase in value. Inventory 35,000 Sales Revenue 35,000 (b) Because the general level of prices increased during...

  • 11. A brewing company operating in an Ontario city experiencing water shortages received its water bill...

    11. A brewing company operating in an Ontario city experiencing water shortages received its water bill for December 2018, on December 31, 2018. The bill ($8,000) represents the cost of water used in December to make its product. The company will not publish the 2018 financial statements until February 2019. Therefore, the adjusting entry as of December 31, 2018 includes which of the following? A. cr. utilities payable $8,000 B. cr. cash $8,000 C. cr. utilities expense $8,000 D. no...

  • 11. A brewing company operating in an Ontario city experiencing water shortages received its water bill...

    11. A brewing company operating in an Ontario city experiencing water shortages received its water bill for December 2018, on December 31, 2018. The bill ($8,000) represents the cost of water used in December to make its product. The company will not publish the 2018 financial statements until February 2019. Therefore, the adjusting entry as of December 31, 2018 includes which of the following? A. cr. utilities payable $8,000 B. cr. cash $8,000 C. cr. utilities expense $8,000 D. no...

  • Case 5-1 Accounting for BP P:C's Deep water Horizon Oil Spill Case 5-1 Accounting for BP...

    Case 5-1 Accounting for BP P:C's Deep water Horizon Oil Spill Case 5-1 Accounting for BP PLC’s Deepwater Horizon Oil Spill On April 20, 2010, an explosion at BP PLC’s Macondo well in the Gulf of Mexico caused the largest oil spill and one of the worst environmental disasters in U.S. history. Because the incident occurred at the Deepwater Horizon drilling rig, this incident is often referred to as the Deepwater Horizon spill. Approximately 4.9 million barrels of oil were...

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