42.Obedience Company provided the following facts regarding pending litigation on December 31, 2020: a.) Obedience is the defendant in a patent infringement suit by another entity over Obedience's use of a hydraulic compressor in several of its manufacture appliances. Obedience's lawyer informed the company that if the suit goes against the company, the loss may be as much as P10million. However, the lawyer believes that the loss of this suit is only possible. b.) The company is involved in a lawsuit for violating environmental laws regulating hazardous waste. Although the litigation is pending, Obedience's lawyer is certain that the entity will most probably have to pay cleanup costs and fines somewhere in the range of P3,000,000 and P5,000,000 Required: What amount of lawsuit liability should be reported as a provision on Obedience's December 31, 2020, Statement of Financial Position. 43. Honesty Company sells electrical goods covered by one-year warranty for any defects. Of the sales of P35,000,000 for the year, the entity estimated that 3% will have major defect, 5% will have minor defect and 92% will have no defect. The cost of repairs would be P2,500,000 if all the products sold had major defect and P1,500,000 if all had minor defect. What amount should be recognized as a warranty provision? 44. Honesty Company extracts natural gas and oil in the Philippine Deep. On January 1, 2020, the entity constructed a drilling platform for P25,000,000 and is required by the Philippine law to remove and dismantle the platform at the end of its useful life of 10 years. The straight line method is used in depreciating the drilling platform. The entity estimated that such decommissioning will cost P5,000,000. Assume a 10% discount rate. Assume further that after 10 years, Honesty contracted another entity to dismantle and remove the drilling platform for P6,200,000. Compute the loss on settlement of decommissioning