Question

Finley Roofing is involved with several situations that possibly involve contingencies. Each is described below. Finley’s fiscal year ends December 31, and the 2023 financial statements are issued on March 20, 2024. Finley is involved in a lawsuit resulting from a dispute with a customer. On January 25, 2023, judgment was rendered against Finley in the amount of $36 million plus interest, a total of $40 million. Finley plans to appeal the judgment, and believes it highly probable that the judgement will be reduced to between $22 million to $24 million.

Answer 1

Finley Roofing is involved in a lawsuit and facing a contingency that may impact their financial position.

Step-by-step explanation:

The subject of this question is Business and it is at a College level.

Finley Roofing is involved in a lawsuit and is facing a contingency. A contingency is an uncertain event or condition that may adversely affect the financial position of a company. In this case, the contingency is the judgment against Finley of $40 million. Finley plans to appeal the judgment and believes it will be reduced to a range of $22 million to $24 million. The outcome of the contingency will impact Finley's financial statements.