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What amount should ajax accrue for liabilities

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Reference no: EM132973814

Question - In Feb 2021, Ajax Lmt. was notified of a lawsuit filed against it. As a result of this lawsuit, it is probable that Ajax will have to pay damage in the range of $300,000 to $700,000. In July 2021, an employee accused Ajax's CEO of creating a hostile work environment in a lawsuit files in US District Court. Ajax denies the allegation, and counsel advises that a loss in court is only reasonably possible, predicting a maximum potential award of damages of $100,000. Finally, in Dec 2021, Ajax is cited by the EPA for possible pollution violations in disposing of asbestos waste, with possible fines of $1,000,000. In-house counsel advise that the chance of the EPA successfully fining Ajax is remote. What amount, if any, should Ajax accrue for these possible contingent liabilities?

A. $400,000

B. $700.000

C. $1,300,000

D. $300,000

Reference no: EM132973814

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