Question: - Question 1 (5 marks) In December 2027, Barbados Company was sued by the government for violation of environmental laws. On March 5, 2028, judgment

- Question 1 (5 marks) In December 2027, Barbados Company was sued by the government for violation of environmental laws. On March 5, 2028, judgment was rendered. The company had to pay $250,000 as settlement. Barbados' fiscal year ended at Dec 31 and financial statements were issued on Mar 31 in the following year. Required: a. Determine whether the above situation is a "contingent liability" or "provision" at December 31,2027. (1 mark) b. Determine the appropriate accounting treatment of the above situation at December 31 , 2027 and prepare the journal entries if necessary. (4 marks)

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