FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Transcribed Image Text:Iniciar ses
On February 15, 2022, CHAS received notice that a client may sue the ☆
company for $10 million. The lawsuit is based on an accident the
customer had at the CHAS store on December 23, 2021.
The claim has not been filed by the client. However, CHAS
understands that the client is likely to sue, and the firm's legal counsel
understands that the client is also likely to win the case. However, the
amount estimated by the advisers is between $3.5 million and $6
million.
CHAS closes its books on December 31 of each year. The 2018 10k
report and annual report were released on March 25, 2019. How
should CHAS record this event?
to.
As a loss in the 2021 Statement of Income and Expenses for $3.5
million.
b.
As a loss in the 2022 Statement of Income and Expenses for $3.5
million.
С.
As a loss in the Statement of Income and Expenses for 2021 for $6
million because it is the most conservative.
d.
As a note to the 2018 financial statements with no effect on the
acBook Air
Transcribed Image Text:to.
As a loss in the 2021 Statement of Income and Expenses for $3.5
million.
b.
As a loss in the 2022 Statement of Income and Expenses for $3.5
million.
C.
As a loss in the Statement of Income and Expenses for 2021 for $6
million because it is the most conservative.
d.
As a note to the 2018 financial statements with no effect on the
financial statements because the lawsuit has not yet been filed.
MacBook Air
DII
DD
F7
F8
F9
F10
F11
F1
*
8.
%3D
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