For each of the give events below, determine the journal entry to recognize the

provision, if any, on December $31,2023$:

a$.$ One of the entity's tanker leaked hundreds of gallons of oil to the ocean on October $1,2023.$ There is no law requiring the entity to clean$-$up the spilled oil.

However, the entity is committed to make good of any environmental damage it previously made during the prior years as part of its corporate social responsibility. Costs of cleaning and rehabilitating the affected area are reliably estimated at P$6,000,000.$

b$.$ One of the entity's tanker leaked hundreds of gallons of oil to the ocean on October $1,2023.$ There is a law requiring the entity to clean$-$up the spilled oil. However, costs of cleaning and rehabilitating the affected area are not reliably measurable.

c$.$ An entity's new medicine released to the public during $2023$ caused unwanted side effects that resulted to mental anguish and physical suffering of some of the users. These users filed a single legal suit against the entity. Based on the reliable estimate, there is an $80\%$ chance that the entity will be prosecuted and required

to pay a total of P$4,000,000$ damages.

d$.$ An entity's new medicine released to the public in $2023$ caused unwanted side effects that resulted to mental anguish and physical suffering of some of the users. These users filed a single legal suit against the entity which has a $45\%$ likelihood that will make the entity liable for P$7,000,000$ damages.

e$.$ A common carrier entity is legally required to periodically replace the tires of its fleet of provincial buses every five years as a precondition for the renewal of its franchise. As of December $31,2023,$ there are still three years before the required replacement of tires. Costs of tire replacement after three years are estimated at

$P2,000,000.$ Relevant discount rate is $8\%.$

f$.$ As of December $31,2023,$ based on the current state of an entity's mining operations, it is probable that an environmental damage will happen in few months' time. Local regulation requires the reparation of such damages. In case there is an actual environmental damage, costs to rehabilitate the affected are estimated to be $P3,000,000.$

Answer rating: 100% (QA)

Here are the journal entries for the given events a One of the entitys tanker leaked hundreds of gallons of oil to the ocean on October 1 2023 There i... View the full answer