Bu Co. is being sued for illness caused to local residents as a result of negligence on the company's part in permitting the local residents to be exposed to highly toxic chemicals from its plant. Bu's lawyer states that it is probable that Bu will lose the suit and be found liable for a judgment costing Bu anywhere from P1,600,000 to P8,000,000. However, the lawyer states that the most probable cost is P 4,800,000. As a result of the above facts, Bu should accrue: * a. a loss contingency of P 4,800,000 and disclose an additional contingency of up to P 3,200,000 b. a loss contingency of P 1,600,000 and disclose an additional contingency of up to P 6,400,000 c. a loss contingency of P 4,800,000 but not disclose any additional contingency d. no loss contingency but disclose a contingency of P 1,600,000 to P 8,000,000

Bu Co. is being sued for illness caused to local residents as a result of negligence on the company's part in permitting the local residents to be exposed to highly toxic chemicals from its plant. Bu's lawyer states that it is probable that Bu will lose the suit and be found liable for a judgment costing Bu anywhere from P1,600,000 to P8,000,000. However, the lawyer states that the most probable cost is P 4,800,000. As a result of the above facts, Bu should accrue: * a. a loss contingency of P 4,800,000 and disclose an additional contingency of up to P 3,200,000 b. a loss contingency of P 1,600,000 and disclose an additional contingency of up to P 6,400,000 c. a loss contingency of P 4,800,000 but not disclose any additional contingency d. no loss contingency but disclose a contingency of P 1,600,000 to P 8,000,000

Business Its Legal Ethical & Global Environment

10th Edition

ISBN:9781305224414

Author:JENNINGS

Publisher:JENNINGS

Chapter11: Environmental Regulation And Sustainability

Section: Chapter Questions

Problem 3QAP

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Superb Corporation is being sued for illness caused to local residents as a result of negligence on the company's part in permitting the local residents to be exposed to highly toxic chemicals from its plant. Superb’s lawyer states that it is probable that Superb will lose the suit and be found liable for a judgment costing Superb anywhere from $1,200,000 to $6,000,000. However, the lawyer states that the most probable cost is $3,600,000. As a result of the above facts, Superb should accrue Select one: a loss contingency of $3,600,000 and disclose an additional contingency of up to $2,400,000. a loss contingency of $3,600,000 but not disclose any additional contingency. a loss contingency of $1,200,000 and disclose an additional contingency of up to $4,800,000. no loss contingency but disclose a contingency of $1,200,000 to $6,000,000.
Superb Corporation is being sued for illness caused to local residents as a result of negligence on the company's part in permitting the local residents to be exposed to highly toxic chemicals from its plant. Superb's lawyer states that it is probable that Superb will lose the suit and be found liable for a judgment costing Superb anywhere from $1,200,000 to $6,000,000. However, the lawyer states that the most probable cost is $3,600,000. As a result of the above facts, Superb should accrue Select one: а. no loss contingency but disclose a contingency of $1,200,000 to $6,000,000. O b. a loss contingency of $1,200,000 and disclose an additional contingency of up to $4,800,000. Ос. a loss contingency of $3,600,000 but not disclose any additional contingency. O d. a loss contingency of $3,600,000 and disclose an additional contingency of up to $2,400,000.
Wooten Co. is being sued for illness caused to local residents as a result of negligence on the company's part in permitting the local residents to be exposed to highly toxic chemicals from its plant. Wooten's lawyer states that it is probable that Wooten will lose the suit and be found liable for a judgment costing Wooten anywhere from $1,800,000 to $9,000,000. However, the lawyer states that the most probable cost is $5,400,000. As a result of the above facts, Wooten should accrue A) a loss contingency of $1,800,000 and disclose an additional contingency of up to $7,200,000. B) a loss contingency of $5,400,000 and disclose an additional contingency of up to $3,600,000. C) a loss contingency of $5,400,000 but not disclose any additional contingency. D) no loss contingency but disclose a contingency of $1,800,000 to $9,000,000.
Swifty Corporation is being sued for illness caused to local residents as a result of negligence on the company's part in permitting the local residents to be exposed to highly toxic chemicals from its plant. Swifty's lawyer states that it is probable that Swifty will lose the suit and be found liable for a judgment costing Swifty anywhere from $ 1830000 to $ 8960000. However, the lawyer states that the most probable cost is $ 5410000. As a result of the above facts, Swifty should accrue a loss contingency of $ 1830000 and disclose an additional contingency of up to $ 7130000. a loss contingency of $ 5410000 and disclose an additional contingency of up to $ 3550000. no loss contingency but disclose a contingency of $ 1830000 to $ 8960000. a loss contingency of $ 5410000 but not disclose any additional contingency.
Vaughn Manufacturing is being sued for illness caused to local residents as a result of negligence on the company's part in permitting the local residents to be exposed to highly toxic chemicals from its plant. Vaughn's lawyer states that it is probable that Vaughn will lose the suit and be found liable for a judgment costing Vaughn anywhere from $1820000 to $8970000. However, the lawyer states that the most probable cost is $5370000. As a result of the above facts, Vaughn should accrue O a loss contingency of $5370000 but not disclose any additional contingency. O a loss contingency of $1820000 and disclose an additional contingency of up to $7150000. O no loss contingency but disclose a contingency of $1820000 to $8970000. O a loss contingency of $5370000 and disclose an additional contingency of up to $3600000.
Sheila Company is engaged in the manufacture of chemicals which it exports to other countries. On December 25, 2021, one of its tanks in the production assembly plant exploded. Unfortunately one of its employees was caught by the accident and suffered severe burns all over his body. For damages sustained because of the explosion, the employee sued Sheila and claimed an amount totaling P10,000,000 for physical injuries sustained. The lawyers of Sheila expect that Sheila Company will probably lose the lawsuit and estimate that the company may have to pay an amount in the range of P5,000,000 to P8,000,000. On March 15, 2022, upon the advice of his lawyers, the injured employees offered to have an out of court settlement of P7,500,000. The offer was tendered on the same date and Sheila on the advice of its legal counsel accepted the said offer on March 20, 2022. Sheila’s financial statements for the year ended 2021 was issued on March 30, 2022. Sheila’s financial statements for the year…
H company was shed for permitting local residents to be exposed to toxic chemicals from its plant, the company lost its suit. Lawyers concluded that it is probably that the company will be liable for judgment costing any Where from birr 800000 to be birr 120000but no specific amount is estimated how much litigation liability the company should accrue
a b Weaver Company is being sued by a former employee, Weaver believes that there is a remote chance that the employee will win. The employee suing Weaver for damages of $40,000 Gulf Refinery had a gas explosion on one of its oil rigsGulf believes it is likely that it will have to pay environmental clean-up costs and damages in the future due to the gas explosion. Gulf cannot estimate the amount of the damages Lawson Enterprises estimates that it will have to pay $75,000 in warranty repairs next year
Pitchfork Company is being sued by a competitor in a lawsuit alleging patent infringement. Pitchfork's lawyers state that it is possible Pitchfork will lose the suit and be found liable for a judgment costing anywhere from $1,800,000 to $9,000,000. However, the lawyers state that no one estimate is more likely. As a result of the above information, Pitchforks should report: a contingent liability in the amount of $5,400,000, representing the average amount within the range of damages, on its Balance Sheet and disclose an additional contingency of up to $3,600,000 in the notes to the Balance Sheet. a contingent liability in the amount of $1,800,000 on its Balance Sheet and disclose an additional contingency of up to $7,200,000 in the notes to the Balance Sheet. a contingent liability in the amount of $5,400,000 on its Balance Sheet, but not disclose any additional contingency. O a possible contingency of between $1,800,000 and $9,000,000 only in the notes of the 10K.
Constant Company is being sued for P4, 000,000 for an injury caused to a child as a result of alleged negligence while the child was visiting the Constant Company plant in March 2018. The suit was filed in July 2018. Constant’s lawyer states that it is probable that Constant will lose the suit and be found liable for a judgement costing anywhere from P400, 000 to P2, 000,000. However the lawyer states that the most probable judgement is P1, 000,000. Instructions:How should Constant report the suit in its 2018 financial statements. Discuss the rationale for your answer. Include in your disclosures, if any, that should be made in Constant’s financial statements
As a result of an allegedly defective equipment causing harm to an employee, an entity is facing a lawsuit requesting damages. The entity's legal counsel estimates that there is an approximately 60% possibility that the entity will lose the case and that it will have to pay an amount between $100,000 and $200,000 with no amount within such range being more likely than any other amount in the range. How much should the entity record as a contingent loss, if any? (Select the best answer.) a. O $0 b. $60,000 c. O $100,000 d. O $150,000
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