Analyze the Following Independent Situations

question 83

Essay

Analyze the following independent situations.
Required: For each situation,state the likelihood of a future event and state how the contingency will be reported.
a.Company A estimates it will have to pay $85,000 in warranty repairs next year.
b.Company B is being sued by a customer.Company B's attorneys feel that this is a frivolous lawsuit and there is very little chance that the customer will win.
c.Company C co-signed a note payable for Company D.Company D is having serious financial problems and it is reasonably possible that Company C will have to pay the note.
d.Company E is being sued for a patent infringement.Company E's attorney feels that Company E will be found liable for damages caused by the patent infringement.However,the attorney states it is not possible to estimate the amount of the award.

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Definitions:

Vesicles

Small cavities in volcanic rocks created by the expansion of gas bubbles during solidification of the magma.

Flow Bands

Visible layers or bands in volcanic rocks that indicate the flow direction of the magma from which the rocks formed.

Igneous Rock

Rock material that has solidified and crystallized from molten magma or lava.

High-Viscosity

A term that describes a fluid's resistance to flow, with high-viscosity fluids moving more slowly than low-viscosity fluids.