The Park Company Is Affected by the Following Contingencies at the End

question 118

Multiple Choice

The Park Company is affected by the following contingencies at the end of 2016:
1) Expropriation of Park's foreign assets, valued at $3,000,000, appears reasonably possible.
2) Parks' legal counsel has concluded that it is probable that the company will be required to pay damages of $500,000 in a lawsuit.
3) It appears remotely possible that a major customer will be unable to repay Parks on a note receivable for $100,000.
4) Parks' controller estimates that $250,000 of the company's pledged receivables are likely to be uncollectible, and the lender will require Parks to honor the amounts.
What total amount should Parks accrue for loss contingencies in 2016?

• A) $750,000
• B) $850,000
• C) $3,500,000
• D) $3,850,000

---

Definitions:

Self-defeating Thoughts

Negative and irrational thoughts that undermine one's success or well-being, often a focus in cognitive behavioral therapy.

Relationship Roles

Refers to the expected behaviors and responsibilities assumed by individuals in various interpersonal relationships, such as in families, friendships, and romantic partnerships.

Causing Relapses

Involves the actions or events that lead to the re-emergence or worsening of symptoms in a previously treated condition.

Barbiturate Abuse

The misuse or overuse of barbiturates, a class of drugs that act as central nervous system depressants, leading to addiction, health issues, or even fatal overdose.