Ch 8 Q 1

Computer Academic Press faces three potential contingency situations, described below. Computer's fiscal year ends December 31, 2024. 1. In August 2024, a worker was injured in an accident, partially as a result of his own negligence. The worker has sued the company for $0.98 million. Legal counsel believes it is reasonably possible that the outcome of the suit will be unfavorable, and that the settlement would cost the company from $245,000 to $490,000. 2. A suit for breach of contract seeking damages of $1,900,000 was filed by a consultant on October 4, 2024. Legal counsel believes an unfavorable outcome is probable. A reasonable estimate of the award to the plaintiff is between $0.950 million and $1.425 million. No amount within this range is a better estimate of potential damages than any other amount. 3. Computer is the plaintiff in a pending court case. Its lawyers believe it is probable that Computer will be awarded damages of $1.9 million. Journal entry worksheet In August 2024, a worker was injured in an accident, partially as a result of his own negligence. The worker has sued the company for $0.98 million. Legal counsel believes it is reasonably possible that the outcome of the suit will be unfavorable, and that the settlement would cost the company from $245,000 Note: Enter debits before credits