How much should be recorded as accrued liability

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Question - Provision - Give the Correct Answer. Show Complete Solution and Explain - Taylor Corporation gave the ff selected contingency transactions. The fiscal year finishes on Dec. 31, 2021. On April 2, 2022, financial statements are released.

In Dec. 2021, Taylor Corp. discovered an engineering flaw in an item that might cause a potential risk on injury. As a consequence, it looks that a product recall is unavoidable. This move would most certainly cost the company P1,800,000.

In Nov. 2021, Cebu City filed suit against Taylor Corp. asking civil penalties and injunctive relief for infringement of clean water regulations. The corporation reached a settlement with the city government to pay P3,200,000 in penalties on Feb. 18, 2022.

Taylor Corp. is the plaintiff in a P4,000,000 lawsuit filed against a customer for expenditures and lost profits incurred as a result of a contract rejection in 2021.

The lawsuit is in final appeal and the counsel advised that it is virtually probable that the corporation will be awarded P3,000,000. On Dec. 31, 2021, how much should be recorded as accrued liability?

Reference no: EM133056797

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