James Soda is a regional soda manufacturer. James is currently facing three lawsuits, summarized below: Required: How
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James Soda is a regional soda manufacturer. James is currently facing three lawsuits, summarized below:
Required:
How should James report each of the lawsuits in its financial statements and footnotes?
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Probability of future economic sacrifice Disclosure Requirement A customer is suing James for $1 million because he claims to have found a piece of glass in his soda. Management deems the а. probability that James will lose the lawsuit and have to pay $1 million as reasonably possible. An employee is suing James for $500,000 for an injury she incurred in the parking lot while walking to work. Management deems the b. probability that James will lose the lawsuit as probable but estimates that a reasonable payout will be $100,000, not $500,000. A customer is suing James for $300,000 because her last name is James and she claims James stole her name. Management deems C. the probability that James will lose the lawsuit and have to pay $300,000 as remote. Probability of future economic sacrifice Disclosure Requirement A customer is suing James for $1 million because he claims to have found a piece of glass in his soda. Management deems the а. probability that James will lose the lawsuit and have to pay $1 million as reasonably possible. An employee is suing James for $500,000 for an injury she incurred in the parking lot while walking to work. Management deems the b. probability that James will lose the lawsuit as probable but estimates that a reasonable payout will be $100,000, not $500,000. A customer is suing James for $300,000 because her last name is James and she claims James stole her name. Management deems C. the probability that James will lose the lawsuit and have to pay $300,000 as remote.
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Related Book For
Financial Accounting
ISBN: 978-1259222139
9th edition
Authors: Robert Libby, Patricia Libby, Frank Hodge
Posted Date:
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