What is the measurement of the provision on december

Assignment Help Accounting Basics
Reference no: EM132688474

Problem 1: During 2020, Lan Company is the defendant in a breach of patent lawsuit. The lawyers believe there is an 80% chance that the court will not dismiss the case and the entity will incur outflow of benefits. If the court rules in favor of the claimant, the lawyers believe that there is a 60% chance that the entity will be required to pay damages of P2,000,000 and a 40% chance that the entity will be required to pay damages of P1,000,000. Other amounts of damages are unlikely. There is no indication that the claimant will settle out of court. The court is expected to rule in late December 2021.An 8% risk adjustment factor to the cash flows is considered appropriate to reflect the uncertainties in the cash flow estimates. The appropriate discount rate is 12%. The PV of 1 at 12% for one period is .89. What is the measurement of the provision on December 31, 2020?

Reference no: EM132688474

Questions Cloud

Explain the evidence-based practice process : The first step of the evidence-based practice process is to evaluate a nursing practice environment to identify a nursing problem in the clinical area.
Brain chemistry may play in criminal behavior : Discuss the role that brain damage, abnormalities in brain structure, and disturbances in brain chemistry may play in criminal behavior.
What amount of loss from lawsuit should be reported : The financial statements for 2020 were issued on March 25,2021. What amount of loss from lawsuit should be reported in the income statement for 2020?
Explain how you would measure progress toward the goal : Analyze how this goal supports the mission and vision of the hospital. Explain how you would measure progress toward the goal.
What is the measurement of the provision on december : What is the measurement of the provision on December 31, 2020? During 2020, Lan Company is the defendant in a breach of patent lawsuit.
Substance in hazcom program chemical inventory : Discuss the OSHA Guidance Document for Hazard Evaluation criteria for including a substance in a HazCom program chemical inventory.
Information on hazardous material labeling system : Share with the class some information on the hazardous material labeling system in use at either your current organization or a previous one.
Coefficient of kinetic friction between the box : (a) What is the coefficient of kinetic friction between the box and the horizontal surface.
What is the amount of undiscounted cash flows for provision : The appropriate discount rate is 12%. The PV of 1 at 12% for one period is .89. What is the amount of undiscounted cash flows for the provision?

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd