Cullumber Co. is being sued for illness caused to local residents as a result of negligence on the company's part in permitting the residents to be exposed to highly toxic chemicals from its plant. Cullumber's lawyer states that it is probable that Cullumber will lose the suit and be found liable for a judgment costing Cullumber anywhere from $1800000 to $8990000. However, the lawyer states that the most probable cost is $5400000. As a result of the above facts, Cullumber should accrue no loss contingency but disclose a contingency of $1800000 to $8990000. a loss contingency of $5400000 and disclose an additional contingency of up to $3590000. a loss contingency of $1800000 and disclose an additional contingency of up to $7190000, a loss contingency of $5400000 but not disclose any additional contingency.

Cullumber Co. is being sued for illness caused to local residents as a result of negligence on the company's part in permitting the residents to be exposed to highly toxic chemicals from its plant. Cullumber's lawyer states that it is probable that Cullumber will lose the suit and be found liable for a judgment costing Cullumber anywhere from $1800000 to $8990000. However, the lawyer states that the most probable cost is $5400000. As a result of the above facts, Cullumber should accrue no loss contingency but disclose a contingency of $1800000 to $8990000. a loss contingency of $5400000 and disclose an additional contingency of up to $3590000. a loss contingency of $1800000 and disclose an additional contingency of up to $7190000, a loss contingency of $5400000 but not disclose any additional contingency.

Business Its Legal Ethical & Global Environment

10th Edition

ISBN:9781305224414

Author:JENNINGS

Publisher:JENNINGS

Chapter11: Environmental Regulation And Sustainability

Section: Chapter Questions

Problem 3QAP

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