Like many other large companies, The Cheesecake Factory Incorporated has several legal actions pending against it at any given time It must accrue for and/or disclose certain contingent liabilities, such as pending or possible legal actions in its financial statements and notes to its financial statements. The necessary reporting depends on the specific circumstances of the situations and its attorneys' assessment of the potential outcomes Here are four hypothetical legal situations that might face The Cheesecake Factory Refer to situation D. With respect to its financial statements and notes to the financial statements. The Cheesecake Factory should O A Disclose the contingent liability but not accrue for it O B. Accrue for a contingent liability and disclose it C. Neither accrue nor discloset Hypothetical Situations X Situation A: A former restaurant employee filed a class-action lawsuit alleging that The Cheesecake Factory violated the local law when it required employees to purchase their work uniforms Legal counsel has indicated that the case will probably be settled for $2,500 Situation B: A customer filed a lawsuit alleging that The Cheesecake Factory was negligent when she slipped and foll on a wet for near the bar area in a Cheesecake Factory in Topeka, Kansas Legal counsel has indicated that the company wil most likely settle this case, but counsel is unable to estimate the dollar amount of the settlement Situation C:A customer filed a lawsuit alleging that The Cheesecake Factory caused her severe emotional distress when her favorite dessert was out of stock for her birthday dinner at the restaurant Legal counsel has indicated that the chance of losing this lawsuit is remote Situation D: A former restaurant hourly employee filed a class-action lawsuit for 5200,000 alleging that The Cheesecake Factory violated the local law by failing to pay overtime Legal counsel has stated that is reasonably possible, but not probable that The Cheesecake Factory could lose the lawsuit Print Done Click to en Like many other large companies, The Cheesecake Factory Incorporated has several legal actions pending against it at any given time It must accrue for and/or disclose certain contingent liabilities, such as pending or possible legal actions in its financial statements and notes to its financial statements. The necessary reporting depends on the specific circumstances of the situations and its attorneys' assessment of the potential outcomes Here are four hypothetical legal situations that might face The Cheesecake Factory Refer to situation D. With respect to its financial statements and notes to the financial statements. The Cheesecake Factory should O A Disclose the contingent liability but not accrue for it O B. Accrue for a contingent liability and disclose it C. Neither accrue nor discloset Hypothetical Situations X Situation A: A former restaurant employee filed a class-action lawsuit alleging that The Cheesecake Factory violated the local law when it required employees to purchase their work uniforms Legal counsel has indicated that the case will probably be settled for $2,500 Situation B: A customer filed a lawsuit alleging that The Cheesecake Factory was negligent when she slipped and foll on a wet for near the bar area in a Cheesecake Factory in Topeka, Kansas Legal counsel has indicated that the company wil most likely settle this case, but counsel is unable to estimate the dollar amount of the settlement Situation C:A customer filed a lawsuit alleging that The Cheesecake Factory caused her severe emotional distress when her favorite dessert was out of stock for her birthday dinner at the restaurant Legal counsel has indicated that the chance of losing this lawsuit is remote Situation D: A former restaurant hourly employee filed a class-action lawsuit for 5200,000 alleging that The Cheesecake Factory violated the local law by failing to pay overtime Legal counsel has stated that is reasonably possible, but not probable that The Cheesecake Factory could lose the lawsuit Print Done Click to en
