In preparing Pronghorn Corporation's December 31, 2023 financial statements under ASPE, the vice-president, finance, is trying to determine the proper accounting treatment for each of the following situations. 3. 4. 1. 2. As a result of uninsured accidents during the year, personal injury suits for $320,000 and $60,000 have been filed against Pronghorn. It is the judgement of Pronghorn's lawyers that an unfavourable outcome is unlikely in the $60,000 case but that an unfavourable verdict for approximately $255,000 is likely in the $320,000 case. In early 2023, Pronghorn received notice from the provincial environment ministry that a site Pronghorn had been using to dispose of waste was considered toxic, and that Pronghorn would be held responsible for its cleanup under provincial legislation. The vice-president, finance, discussed the situation over coffee with the vice-president, engineering. The engineer stated that it would take up to three years to determine the best way to remediate the site and that the cost would be considerable, perhaps as much as $540,000 to $2.16 million or more. The engineering vice-president advocates recognizing at least the minimum estimate of $540,000 in the current year's financial statements. The financial vice-president advocates just disclosing the situation, and the inability to estimate the cost, in a note to the financial statements. Pronghorn has a foreign division that has a net carrying amount of $5,685,000 and an estimated fair value of $8.7 million. The foreign government has told Pronghorn that it intends to expropriate the assets and businesses of all foreign investors. Based on settlements that other firms have received from this same country, Pronghorn expects to receive 45% of the fair value of its properties as compensation. Pronghorn's chemical products division consists of five plants and is uninsurable because of the special risk of injury to employees and losses due to fire and explosion. Consequently, Sahoto must self-insure for these risks. The year 2023 is considered one of the safest in the division's history because there were no losses due to injury or casualty. Having suffered an average of three casualties a year during the rest of the past decade (ranging from $60,000 to $700,000), management is certain that next year Pronghorn will not be so fortunate.

determien the proper accounting treatmient for fuchof the folbwifesifuation. an urdavocablo verdict for approvinately $755000 is thely in the $320000 case. 2. In early 2023 . Propgorn recelved natice from the provincial eivionment ministry that a site Prenghorn had beenunirs to stafed that is wadd bie up ta three years to determire the best way to remedoate the jite and that ithe cent would be its croperibesas cotrochsation. irertain that next year Prorwiorn will not beso foitunate