27) On December 25, 2024, an employee filed a P3,000,000 a lawsuit against Ox Ford Company...

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27) On December 25, 2024, an employee filed a P3,000,000 a lawsuit against Ox Ford Company for damages suffered when one of Ox Ford's equipment malfunctioned in August of 2024. The legal counsel of the company believes that it is probable that Ox Ford will pay the damages raging between P500,000 to P1,000,000. Each point within the range is as likely as any other. On March 1, 2025, the employee has offered to settle the lawsuit out of court for P900,000 and the company accepted the offer and settled the amount. The financial statements were authorized to be issued on March 31, 2025. How much is the provision that should be recognized as of December 31, 2024? A. 820,000 B. 900,000 C. 750,000 D. 1,000,000 27) On December 25, 2024, an employee filed a P3,000,000 a lawsuit against Ox Ford Company for damages suffered when one of Ox Ford's equipment malfunctioned in August of 2024. The legal counsel of the company believes that it is probable that Ox Ford will pay the damages raging between P500,000 to P1,000,000. Each point within the range is as likely as any other. On March 1, 2025, the employee has offered to settle the lawsuit out of court for P900,000 and the company accepted the offer and settled the amount. The financial statements were authorized to be issued on March 31, 2025. How much is the provision that should be recognized as of December 31, 2024? A. 820,000 B. 900,000 C. 750,000 D. 1,000,000

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Answer is highlighted in yellow Solution Answer Explanation C 7... View the full answer