Below Are Three Independent Situations

question 166

Essay

Below are three independent situations.1. In August, 2014 a worker was injured in the factory in an accident partially the result of his own negligence. The worker has sued Barkley Co. for $800,000. Counsel believes it is reasonably possible that the outcome of the suit will be unfavorable and that the settlement would cost the company from $250,000 to $500,000.2. A suit for breach of contract seeking damages of $2,400,000 was filed by an author against Henderson Co. on October 4, 2014. Henderson's legal counsel believes that an unfavorable outcome is probable. A reasonable estimate of the award to the plaintiff is between $800,000 and $1,800,000. No amount within this range is a better estimate of potential damages than any other amount."3. Kroft is involved in a pending court case. Kroft's lawyers believe it is probable that Kroft will be awarded damages of $1,000,000.
InstructionsDiscuss the proper accounting treatment, including any required disclosures, for each situation. Give the rationale for your answers."

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Definitions:

Political Machines

Organizations characterized by a strong central leadership which work to secure and maintain political power, often through the use of patronage and sometimes corrupt practices.

Economic Citizenship

A concept where citizenship status and rights are linked to economic contributions or investments in a country.

Social Insurance Programs

Government-sponsored programs designed to provide financial support to individuals in events of unemployment, disability, or old age, aiming to protect against economic risks.

Federal Workmen's Compensation Laws

Laws enacted to provide financial and medical benefits to workers injured on the job, ensuring compensation without the need for litigation.