Use the Following to Answer Questions 33 and 34

question 12

Multiple Choice

Use the following to answer questions 33 and 34:
REFERENCE 11-02
Bugs, Inc., a wholly owned subsidiary of the U.S.-based company, Pillows Ltd., was notified of a loss contingency with an estimated cost ranging between $50,000 and $150,000. Bugs, Inc. hired an expert appraiser who assessed that all possible dollar amounts of liability in this range are equally likely. Management of Bugs, Inc. has estimated that there is a 60 percent chance that this contingency will result in an actual loss.
[QUESTION]
REFER TO: 11-02
-In the conversion from U.S.GAAP financial statements to IFRS financial statements, what is the amount of adjustment needed to adjust for the difference in accounting for a provision for loss contingency?

• A) $0
• B) $50,000
• C) $100,000
• D) $150,000
• E) $200,000

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Definitions:

Self-Sufficiency

The ability of an individual, household, or country to maintain itself without external assistance, relying on its own resources and capacities.

Exchange

A platform or mechanism for trading financial instruments, commodities, or other goods and services between parties.

Silver And Gold

Precious metals historically used as a medium of exchange, investment, and to back currency values in various monetary systems.

Quantity

The amount or number of a material or immaterial good that can be measured or quantified.