What is the accounting treatment for situation in february

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Problem 1: In February, 2020 a worker was injured in the factory in an accident partially the result of his own negligence. The worker has sued Frontier Co. for $1,100,000. Counsel believes it is reasonably possible that the outcome of the suit will be unfavorable and that the settlement would cost the company from $350,000 to $700,000. What is the accounting treatment for the situation?

Problem 2: A suit for breach of contract seeking damages of $2,400,000 was filed by Okurrrr against Cardi Co. on January 4, 2020. Okurrrr's legal counsel believes that an unfavorable outcome is probable. A reasonable estimate of the award to the plaintiff is between $900,000 and $1,300,000. No amount within this range is a better estimate of potential damages than any other amount. What is the accounting treatment for the situation?

Reference no: EM132814851

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