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Analyze the following independent situations. Required: For each situation, state the likelihood of a future...

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Accounting

Analyze the following independent situations. Required: For each situation, state the likelihood of a future event and state how the contingency will be reported.

  1. Company A estimates it will have to pay $85,000 in warranty repairs next year.
  2. Company B is being sued by a customer. Company B's attorneys feel that this is a frivolous lawsuit and there is very little chance that the customer will win.
  3. Company C co- signed a note payable for Company D. Company D is having serious financial problems and it is reasonably possible that Company C will have to pay the note.
  4. Company E is being sued for a patent infringement. Company E's attorney feels that Company E will be found liable for damages caused by the patent infringement. However, the attorney states it is not possible to estimate the amount of the award.

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