medium · Financial Accounting liabilities-bonds-payable
A company is sued for 1,000,000. Legal counsel believes an unfavorable outcome is 'probable' and estimates the loss will range between 200,000 and 600,000, with no amount in the range being a better estimate than any other.
What amount should be accrued?
- 400,000
- 0, but disclose the range in the footnotes.
- 200,000
- 600,000
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