At December 31,2015,ABC Company Has the Following Three Separate Lawsuits

question 29

Essay

At December 31,2015,ABC Company has the following three separate lawsuits pending against it: Suit A-Plaintiffs seek damages of $40,000; Suit B-Plaintiff seeks damages of $200,000; and Suit C-Plaintiff seeks damages of $20,000.
ABC management and legal counsel have made the assessments indicated below.For each suit,taking into account the assessment,you are to (a)give the accrual entry if it is required (if not,state why)and (b)indicate whether a disclosure note is required and explain the reason.
CASE A-Remote that ABC will lose the suit.
(a)Accrual entry:
(b)Disclosure note: _______ Yes ______ No.Explanation:
CASE B-Reasonably possible that ABC will lose; reasonable estimate of damages $4,000.
(a)Accrual entry:
(b)Disclosure note: ______ Yes _______ No.Explanation:
CASE C-Probable that ABC will lose; reasonable estimate of damages $10,000.
(a)Accrual entry:
(b)Disclosure note: ______ Yes ______ No.Explanation:

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Definitions:

Interaction

The process of reciprocal action or engagement between two or more entities, resulting in an effect or exchange.

Leadership Theory

The study of leadership models and approaches to understand what makes an effective leader and how leadership is exercised.

LMX

Leader-Member Exchange theory, which focuses on the relationship between leaders and individual team members, and how it affects dynamics and outcomes.

Vertical Dyadic Relationship

A hierarchical relationship between two individuals, often between a superior and subordinate within an organization.