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Lorange AG became involved in a lawsuit with a government agency. The company's legal counsel indicates that there is a 65 percent likelihood that the
- Lorange AG became involved in a lawsuit with a government agency. The company's legal counsel indicates that there is a 65 percent likelihood that the company will lose this dispute and estimates that the amount the company will have to pay is between $ 500,000 and $ 700,000, with all amounts in that range being equally likely.
Under U.S. GAAP, what amount, if any, should Lorange recognize as a liability related to this lawsuit?
A.$ 500,000
B.$ 700,000.
C.$0.
D.$ 600,000.
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Principles of Financial Accounting chapters 1-17
Authors: John Wild, Ken Shaw, Barbara Chiappetta
23rd edition
1259687740, 1259687747, 978-1259687747
