For Each Independent Situation

question 52

Essay

For each independent situation:
1. A former employee of Melvin Minimarket Inc. sued the company for $900,000, alleging that the company owner sexually harassed her. Melvin's lawyers suggest that the lawsuit has a 30-40% probability of success and that, if successful, the plaintiff will be awarded between $400,000 and $500,000.
2. Leduc Pyrotechnics Ltd. received a $15,000 fee to guarantee the $800,000 bank indebtedness of Kenora Fireworks Inc. The fair value of the guarantee is initially estimated to be $15,000.
3. Montomery Syringes Co. sued a competitor for $800,000, alleging corporate espionage. Montomery's legal counsel believes that the company will be successful and will be awarded somewhere in the range of $650,000 to $800,000.
Required:
Describe how the event should be dealt with in the financial statements and explain why. Prepare all required journal entries.

---

Definitions:

Mobilising Others

The act of organizing, motivating, and leading people toward a common goal or to take collective action.

Controlling Others

Exercising influence or authority over individuals to direct their behavior or decisions, often disregarding their autonomy or preferences.

Leadership

The act of guiding or influencing a group towards achieving its goals through direction, motivation, and implementing strategies.

Power

The ability or capacity to direct or influence the behavior of others or the course of events, widely studied in social and political sciences.