Question

ional penalties were estimated to be $766,000 but could be as high as $1,162,000. After the year-end, but before the 2021 financial statements were issued, Raymond accepted an EPA settlement offer of $892,000. Raymond should have reported an accrued liability on its December 31, 2021, balance sheet of

Answer 1

$892,000

Step-by-step explanation:

The computation of the amount that should be recorded as the accrued liability is as follows:

In the case when the liability is to be probable and the amount that could be reasonably predicted so it should be recorded as the contingent liability

And, the accrued liability that should be reported is $892,000 as it is received prior 2021 financial statement issued

Therefore it is $892,000