Analyze the following independent situations.
Required: For each situation,state the likelihood of a future event and state how the contingency will be reported.
a.Company A estimates it will have to pay $85,000 in warranty repairs next year.
b.Company B is being sued by a customer.Company B's attorneys feel that this is a frivolous lawsuit and there is very little chance that the customer will win.
c.Company C co-signed a note payable for Company D.Company D is having serious financial problems and it is reasonably possible that Company C will have to pay the note.
d.Company E is being sued for a patent infringement.Company E's attorney feels that Company E will be found liable for damages caused by the patent infringement.However,the attorney states it is not possible to estimate the amount of the award.

Question

Quizplus · Accepted Answer

The Answer of Analyze the following independent situations.
Required: For each situation,state the likelihood of a future event and state how the contingency will be reported.
a.Company A estimates it will have to pay $85,000 in warranty repairs next year.
b.Company B is being sued by a customer.Company B's attorneys feel that this is a frivolous lawsuit and there is very little chance that the customer will win.
c.Company C co-signed a note payable for Company D.Company D is having serious financial problems and it is reasonably possible that Company C will have to pay the note.
d.Company E is being sued for a patent infringement.Company E's attorney feels that Company E will be found liable for damages caused by the patent infringement.However,the attorney states it is not possible to estimate the amount of the award.

Analyze the Following Independent Situations