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Ichabod Company is the plaintiff in two lawsuits. The first suit involves a competitor who has made an exact copy of one of Ichabods products,
| Ichabod Company is the plaintiff in two lawsuits. The first suit involves a competitor who has made an exact copy of one of Ichabods products, and Ichabod is suing for patent infringement. The attorneys estimate a $5,000,000 award for Ichabod; however, it is anticipated that the case will be in litigation for 2 to 3 years before final resolution. The second case also involves patent infringement; however, in this instance, the attorneys do not believe Ichabod has a strong case. It is estimated that the company has a 50% chance of winning and the award, if any, would be in the $250,000 to $1,000,000 range. The most appropriate amount to be recorded as a gain contingency is | |
| A. | $0 |
| B. | $5,250,000 |
| C. | $5,125,000 |
| D. | $5,000,000 |
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Advanced Financial Accounting
Authors: Richard E. Baker, Valdean C. Lembke, Thomas E. King
5th Edition
0072444126, 978-0072444124
