Huprey Company is the defendant in the following legal claims. For each of the following separate...

 

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Huprey Company is the defendant in the following legal claims. For each of the following separate claims, indicate whether Huprey should (a) record a liability, (b) disclose in notes, or (c) have no disclosure. 1. Huprey faces the possibility of a loss on a pending lawsuit. It is reasonably possible that Huprey could be required to pay damages. However, it cannot estimate amounts owed. 2. Huprey is very likely to lose a pending lawsuit. It reasonably estimates that damages paid will be $1,070,000. 3. There is a remote (unlikely) chance Huprey will lose a pending lawsuit. The plaintiff is suing Huprey for $5,000,000. Huprey Company is the defendant in the following legal claims. For each of the following separate claims, indicate whether Huprey should (a) record a liability, (b) disclose in notes, or (c) have no disclosure. 1. Huprey faces the possibility of a loss on a pending lawsuit. It is reasonably possible that Huprey could be required to pay damages. However, it cannot estimate amounts owed. 2. Huprey is very likely to lose a pending lawsuit. It reasonably estimates that damages paid will be $1,070,000. 3. There is a remote (unlikely) chance Huprey will lose a pending lawsuit. The plaintiff is suing Huprey for $5,000,000.

Answer rating: 100% (QA)

solution A Contingent liability is recognized in financial statement when chances ... View the full answer