Journalizing liability transactions?
The following transactions of acer downy occurred during 2016:
Apr. 30 downy is party to a patent infringement lawsuit of $180,000. Downy’s
Attorney is certain it is remote that downy will lose this lawsuit.
Jun. 30 estimated warranty expense at 3% of sales of $400,000.
Jul. 28 warranty claims paid in the amount of $5,500.
Sep. 30 downy is party to a lawsuit for copyright violation of $160,000. Downy’s
Attorney advises that it is probable downy will lose this lawsuit. The attorney
Estimates the loss at $160,000.
Dec. 31 downy estimates warranty expense on sales for the second half of the year
Of $530,000 at 3%.
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