Question
On January 15, 2020, Bob Falls slipped on the ice outside of Big Box Department Store. Bob maintains that he was hurt during the Fall,
On January 15, 2020, Bob Falls slipped on the ice outside of Big Box Department Store. Bob maintains that he was hurt during the Fall, and that he incurred medical and other financial problems as a result. Outside cameras recorded the accident, and clearly show Bob falling and hitting his head. Accordingly, Bob has decided to sue Big Box Department Store for damages. The judge has indicated that if the parties do not settle, they case will be heard in court on March 31, 2021. Big Box Department Store'slegal advisers have informed Big Box that they believe if the case goes to trial, there is a 10% chance the court will rule in favor of Big Box and they will pay no damages, there is 70% chance that the court will find BigBox negligent and Big Box will have to pay $ 1,000,000 in damages, and there is a 20% chance the court will rule in favor of Bob Falls and will rule that Big Box has to pay $ 5,000,000 in damages. Assuming that any probability greater than 85% is considered ." probable", what liability, if any, should Big Box Department Store report on their December 31, 2020 Balance Sheet if they decide to take the case tocourt and also want to remain in compliance with US GAAP?
A.$0 B.$ 1,000,000 C.$ 1,700,000 D.$ 5,000,000
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