4. Caribbean Pride Limited, a juice manufacturing company, was recently exposed for spilling the waste from...

 

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4. Caribbean Pride Limited, a juice manufacturing company, was recently exposed for spilling the waste from its manufacturing plant into the river. Since then, the company has been fined $300,000 by the Department of Environment. The company is contesting the fine. An employee is also seeking compensation of $60,000 in damages related to the spill. Finally, a homeowner is suing the company for $120,000. The homeowner lives 25 miles from the plant but believes that the incident has reduced the home's resale value by $120,000. The legal counsel for the company believes that it is probable that the environmental fine will stand. In addition, an out-of-court settlement of $40,000 has recently been reached with the employee. The final papers will be signed next week. Counsel believes that the homeowner's case is much weaker and will be decided in favor of Ayers. Other litigation related to the spill is possible, but the damage amounts are uncertain. a. Journalize the contingent liabilities associated with the hazardous materials spill. Use the account "Damage Awards and Fines" to recognize the expense for the period. 4. Caribbean Pride Limited, a juice manufacturing company, was recently exposed for spilling the waste from its manufacturing plant into the river. Since then, the company has been fined $300,000 by the Department of Environment. The company is contesting the fine. An employee is also seeking compensation of $60,000 in damages related to the spill. Finally, a homeowner is suing the company for $120,000. The homeowner lives 25 miles from the plant but believes that the incident has reduced the home's resale value by $120,000. The legal counsel for the company believes that it is probable that the environmental fine will stand. In addition, an out-of-court settlement of $40,000 has recently been reached with the employee. The final papers will be signed next week. Counsel believes that the homeowner's case is much weaker and will be decided in favor of Ayers. Other litigation related to the spill is possible, but the damage amounts are uncertain. a. Journalize the contingent liabilities associated with the hazardous materials spill. Use the account "Damage Awards and Fines" to recognize the expense for the period.

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step 2 NOTES 340000 300000 for fined by the department of environment 40000 for out of co... View the full answer