Vinson Co is being sued for illness caused to local residents as a result of negligence on the company's part in permitting the local residents to be exposed to highly toxic chemicals from its plant. Vinson's lawyer states that it is probable that Vinson will lose the suit and be found liable for a judgment costing Vinson anywhere from $600,000 to $3,000,000. However, the lawyer states the most probable cost is $1,800,000. As a result of these facts, Vinson should accrue: O a loss contingency of $600,000 and disclose an additional contingency of up to $2,400,000 O a loss contingency of $1.800,000 and disclose an additional contingency of up to $1,200,000 O a loss contingency of $1.800.000 but NOT disclose any additional contingency. O no loss contingency but disclose a contingency of $600,000 to $3.000.000
Vinson Co is being sued for illness caused to local residents as a result of negligence on the company's part in permitting the local residents to be exposed to highly toxic chemicals from its plant. Vinson's lawyer states that it is probable that Vinson will lose the suit and be found liable for a judgment costing Vinson anywhere from $600,000 to $3,000,000. However, the lawyer states the most probable cost is $1,800,000. As a result of these facts, Vinson should accrue: O a loss contingency of $600,000 and disclose an additional contingency of up to $2,400,000 O a loss contingency of $1.800,000 and disclose an additional contingency of up to $1,200,000 O a loss contingency of $1.800.000 but NOT disclose any additional contingency. O no loss contingency but disclose a contingency of $600,000 to $3.000.000
Chapter16: Accounting Periods And Methods
Section: Chapter Questions
Problem 30P
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Transcribed Image Text:Vinson Co is being sued for illness caused to local residents as a result of negligence on the
company's part in permitting the local residents to be exposed to highly toxic chemicals from
its plant. Vinson's lawyer states that it is probable that Vinson will lose the suit and be found
liable for a judgment costing Vinson anywhere from $600,000 to $3,000,000. However, the
lawyer states the most probable cost is $1,800,000. As a result of these facts, Vinson should
accrue:
O a loss contingency of $600,000 and disclose an additional contingency of up to $2,400,000
O a loss contingency of $1.800,000 and disclose an additional contingency of up to $1,200,000
O a loss contingency of $1.800.000 but NOT disclose any additional contingency.
O no loss contingency but disclose a contingency of $600,000 to $3.000.000
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