Orange Hill Manufacturing filed suit against Banana Industries in 2021 seeking damages for patent infringement. At December 31, 2021, legal counsel for Orange Hill believed it was probable that Orange Hill would be successful in its suit against Banana Industries for an estimated amount of $30 million. On February 15, 2022, Orange Hill was awarded $25 million in damages. Orange Hill should report this amount in its 2021 financial statements issued in March 2022 as:

Multiple Choice

• A disclosure of gain contingency of $25 million.

• A receivable and a gain $25 million, and a related disclosure note.

• A receivable and a gain of $30 million, and a related disclosure note.

• A disclosure of a gain contingency of $30 million.

Answer rating: 100% (QA)

Option B A receivable and gain of 25 million and a related dis... View the full answer