On January 17,2014,an Explosion Occurred at an Boondocks Fireworks Plant

question 46

Multiple Choice

On January 17,2014,an explosion occurred at an Boondocks Fireworks plant causing extensive property damage to area buildings.Although no claims had yet been asserted against Boondocks by March 10,2014,Boondocks' management and counsel concluded that it is reasonably possible Boondocks will be responsible for damages and that $2,500,000 would be a reasonable estimate of its liability.Boondocks' $10,000,000 comprehensive public liability policy has a $500,000 deductible clause.In Boondocks' December 31,2014,financial statements,which were issued on March 25,2015,how should this item be reported?

• A) As a footnote disclosure indicating the possible loss of $500,000
• B) As an accrued liability of $500,000
• C) As a footnote disclosure indicating the possible loss of $2,500,000
• D) As an accrued liability of $2,500,000

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Definitions:

Embryo Sac

The female gametophyte within the ovule of flowering plants, where fertilization occurs.

Adventitious Buds

These are buds that develop from an unusual place, not from the usual growth areas like the stem or branch nodes, often in response to stress or injury.

Aboveground Shoots

The parts of a plant that are visible above the soil including stems, leaves, and reproductive structures, critical for photosynthesis and interaction with the environment.

Microsporocyte

Cell within a microsporangium that undergoes meiosis to produce four n microspores; also called microspore mother cell. Compare with megasporocyte.