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    Problem 4-29 To 31

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    maryani
    Caso Company was awarded $1,500,000 in damages in a patent infringement lawsuit against Wayne Company in November 2020. Caso's legal counsel believes it is probable that the amount awarded will be upheld on appeal, and estimates the most likely amount will be $1,000,000. Therefore, Caso should record $1,000,000 as income from the lawsuit for the year ended December 31, 2020.

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    Problem 4-29 To 31

    Uploaded by

    maryani
    761 views1 page
    Caso Company was awarded $1,500,000 in damages in a patent infringement lawsuit against Wayne Company in November 2020. Caso's legal counsel believes it is probable that the amount awarded will be upheld on appeal, and estimates the most likely amount will be $1,000,000. Therefore, Caso should record $1,000,000 as income from the lawsuit for the year ended December 31, 2020.

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    Problem 4-29 to 31

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    Caso Company was awarded $1,500,000 in damages in a patent infringement lawsuit against Wayne Company in November 2020. Caso's legal counsel believes it is probable that the amount awarded will be upheld on appeal, and estimates the most likely amount will be $1,000,000. Therefore, Caso should record $1,000,000 as income from the lawsuit for the year ended December 31, 2020.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    761 views1 page

    Problem 4-29 To 31

    Uploaded by

    maryani
    Caso Company was awarded $1,500,000 in damages in a patent infringement lawsuit against Wayne Company in November 2020. Caso's legal counsel believes it is probable that the amount awarded will be upheld on appeal, and estimates the most likely amount will be $1,000,000. Therefore, Caso should record $1,000,000 as income from the lawsuit for the year ended December 31, 2020.

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    © All Rights Reserved
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    Download as docx, pdf, or txt
    of 1

    Problem 4-29 (AICPA Adapted)

    In May 2020, Caso Company filed suit against Wayn Company seeking P1,900,000
    damages for patent infringement. A court verdict in November 2020 awarded Caso
    Company P1,500,000 in damages, but Wayne Company’s appeal is not expected to be
    decided before 2021.

    The legal counsel believed it is probable that Caso Company will be successful against
    Wayne Company for an estimated amount in the range between P800,000 and
    P1,100,000, with P1,000,000 considered the most likely amount.

    What amount should Caso Company record as income from the lawsuit for the year
    ended December 31, 2020?
    a. 1,500,000 b. 1,100,000 c. 1,000,000 d. 0

    Problem 4-30 (IAA)


    On November 1, 2020, Vienna Company was awarded a judgment of P1,500,000 in
    connection with a lawsuit. The decision is being appealed by the defendant and it is
    expected that the appeal process will be completed by the end of 20. The attorney
    believed that it is highly probable that an award will be upheld on appeal but that the
    judgment may reduced by an estimated 40%.

    What amount should be reported as a receivable on Decem 31, 2020?


    a. 1,500,000 b. 600,000 c. 900,000 d. 0

    Problem 4-31 (AICPA Adapted)


    During 2020, Smith Company filed suit against West Company seeking damages for
    patent infringement.
    On December 31, 2020, the legal counsel believed that it was probable that Smith
    Company would be successful against West Company for an estimated amount of
    P1,500,000.

    On March 31, 2021, Smith Company was awarded P1,000,000 od received full payment
    thereof. The financial statements were issued March 1, 2021.
    In Smith Company's 2020 financial statements, how should this award be reported?
    a. As a receivable and revenue of P1,000,000.
    b. As a receivable and deferred revenue of P1,000,000.
    c. As a disclosure of a contingent asset of P1,000,000.
    d. As a disclosure of a contingent asset of P1,500,000.

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