Question

Huprey Co. is the defendant in the following legal claims. For each of following claims, does Huprey

(a) record a liability,
(b) disclose in notes, or
(c) have no disclosure.

1. Huprey can resonably estimate that a pending lawsuit will result in damages of $1,390,000it is probable that Huprey will lose the case.

a. Have no disclosure.
b. Disclose in notes.
c. Record a liability.

2. It is reasonably possible that Huprey will lose a pending lawsuit. The loss cannot be estimable.

a. Record a liability.
b. Disclose in notes.
c. Have no disclosure.

3. Huprey is being sued for damages of $2,260,000. It is very unlikely (remote) that Huprey will lose the case.

a. Disclose in notes.
b. Record a liability.
c.Have no disclosure.

Answer 1

1. Huprey can resonably estimate that a pending lawsuit will result in damages of $1,390,000 it is probable that Huprey will lose the case. - record a liability

2. It is reasonably possible that Huprey will lose a pending lawsuit. The loss cannot be estimable. - Disclose in notes

3. Huprey is being sued for damages of $2,260,000. It is very unlikely (remote) that Huprey will lose the case. - Have no disclosure