Problem 3Nia company is involved in litigation regarding a faulty product sold in a prior year. The entity hasconsulted with an attormey and determined that is possible that the entity may lose the case.The Attorney estimated that there is a 40% chance of losing. If this is the case, the attorney estimatedthat the amount of any payment would be P5, 000, 000.What is the required journal entry as a result of this litigation?A. Debit litigation expense and credit litigation liability P5,000,000B. No journal entry is required.C. Debit litigation expense and credit litigation liability P2, 000, 000D. Debit litigation expense and credit litigation liability P3, 000,000

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Description: Problem 3Nia company is involved in litigation regarding a faulty product sold in a prior year. The entity hasconsulted with an attormey and determined that is possible that the entity may lose the case.The Attorney estimated that there is a 40% cha

There is a 40% chance of losing the case and in case of losing the case the payment would be…

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Nia company is involved in litigation regarding a faulty product sold in a prior year. The entity has consulted with an attoney and determined that is possible that the entity may lose the case. The Attorney estimated that there is a 40% chance of losing. If this is the case, the attorney estimated that the amount of any payment would be PS, 000, 000. What is the required journal entry as a result of this litigation? A. Debit litigation expense and credit litigation liability P5,000,000 B. No journal entry is required. C. Debit litigation expense and credit litigation liability P2, 000, 000 D. Debit litigation expense and credit litigation liability P3, 000,000

Nia company is involved in litigation regarding a faulty product sold in a prior year. The entity has consulted with an attoney and determined that is possible that the entity may lose the case. The Attorney estimated that there is a 40% chance of losing. If this is the case, the attorney estimated that the amount of any payment would be PS, 000, 000. What is the required journal entry as a result of this litigation? A. Debit litigation expense and credit litigation liability P5,000,000 B. No journal entry is required. C. Debit litigation expense and credit litigation liability P2, 000, 000 D. Debit litigation expense and credit litigation liability P3, 000,000

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter12: Current Liabilities

Section: Chapter Questions

Problem 6PA: Machine Corp. has several pending lawsuits against its company. Review each situation and (1)...

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