Question

Analyze the following independent situations.
a. McKinney, Inc. is being sued by a former employee. McKinney believes that there is a remote chance that the employee will win. The employee is suing McKinney for damages of $ 1,000.
b. Reeves Oil Refinery had a gas explosion on one of its oil rigs. Reeves believes it is likely that it will have to pay environmental clean- up costs and damages in the future due to the gas explosion. Reeves cannot estimate the amount of the damages.
c. Love Enterprises estimates that it will have to pay $ 20,000 in warranty repairs next year. Determine how each contingency should be treated.



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  • CreatedJanuary 16, 2015
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