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What should specialty report on its december balance sheet

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Question - Specialty Producers is involved in two product liability lawsuits and a third lawsuit that the company brought against a competitor for patent infringement. At December 31, 20X1, the company's attorney informed management of the following:

1. It is probable that Specialty will lose one of the product liability lawsuits, although the actual settlement could be as low as $800,000 or as high as $2,000,000, with no one estimate more likely than the other within this range.

2. It is possible that the company could lose $1,000,000 in the second product liability lawsuit.

3. It is probable that Specialty will win $500,000 in the patent infringement case.

Required - What should Specialty report on its December 31, 20X1 balance sheet for these contingent liabilities?

Reference no: EM133095684

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