Tyrion Company sells motorcycle helmets. In 2021, Tyrion sold 4,000,000 helmets before discovering a significant defect in their construction. By December 31, 2021, two lawsuits had been filed against Tyrion. The first lawsuit, which Tyrion has little chance of winning is expected to be settled out of court for P1,500,000 in January 2022. Tyrion's attorneys think the entity has a 50-50 chance of winning the second lawsuit, which is for P1,000,000. What is the accrued liability on December 31, 2021 as a result of the lawsuits?

Tyrion Company sells motorcycle helmets. In 2021, Tyrion sold 4,000,000 helmets before discovering a significant defect in their construction. By December 31, 2021, two lawsuits had been filed against Tyrion. The first lawsuit, which Tyrion has little chance of winning is expected to be settled out of court for P1,500,000 in January 2022. Tyrion's attorneys think the entity has a 50-50 chance of winning the second lawsuit, which is for P1,000,000. What is the accrued liability on December 31, 2021 as a result of the lawsuits?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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