What amount should steel report as liability from lawsuit

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On February 5, year 3, an employee filed a $2,000,000 lawsuit against Steel Co. for damages suffered when one of Steel's plants exploded on December 29, year 2. Steel's legal counsel expects the company will lose the lawsuit and estimates the loss to be between $500,000 and $1,000,000. The employee has offered to settle the lawsuit out of court for $900,000, but Steel will not agree to the settlement.

In its December 31, year 2 balance sheet, what amount should Steel report as liability from lawsuit?

Reference no: EM131105174

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