At December 31,2015,ABC Company has the following three separate lawsuits pending against it: Suit A-Plaintiffs seek damages of $40,000; Suit B-Plaintiff seeks damages of $200,000; and Suit C-Plaintiff seeks damages of $20,000.
ABC management and legal counsel have made the assessments indicated below.For each suit,taking into account the assessment,you are to (a)give the accrual entry if it is required (if not,state why)and (b)indicate whether a disclosure note is required and explain the reason.
CASE A-Remote that ABC will lose the suit.
(a)Accrual entry:
(b)Disclosure note: _______ Yes ______ No.Explanation:
CASE B-Reasonably possible that ABC will lose; reasonable estimate of damages $4,000.
(a)Accrual entry:
(b)Disclosure note: ______ Yes _______ No.Explanation:
CASE C-Probable that ABC will lose; reasonable estimate of damages $10,000.
(a)Accrual entry:
(b)Disclosure note: ______ Yes ______ No.Explanation:

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The Answer of At December 31,2015,ABC Company has the following three separate lawsuits pending against it: Suit A-Plaintiffs seek damages of $40,000; Suit B-Plaintiff seeks damages of $200,000; and Suit C-Plaintiff seeks damages of $20,000.
ABC management and legal counsel have made the assessments indicated below.For each suit,taking into account the assessment,you are to (a)give the accrual entry if it is required (if not,state why)and (b)indicate whether a disclosure note is required and explain the reason.
CASE A-Remote that ABC will lose the suit.
(a)Accrual entry:
(b)Disclosure note: _______ Yes ______ No.Explanation:
CASE B-Reasonably possible that ABC will lose; reasonable estimate of damages $4,000.
(a)Accrual entry:
(b)Disclosure note: ______ Yes _______ No.Explanation:
CASE C-Probable that ABC will lose; reasonable estimate of damages $10,000.
(a)Accrual entry:
(b)Disclosure note: ______ Yes ______ No.Explanation:

At December 31,2015,ABC Company Has the Following Three Separate Lawsuits