Landon Construction Co. carries $10,000,000 comprehensive public liability insurance with a $200,000 deductible clause. A suit for personal injury damages was brought against Landon in 2011. Landon's counsel believes it probable that the insurance company will settle out of court for an estimated amount of $550,000. At December 31, 2011, Landon should report an accrued liability of

Question

Quizplus · Accepted Answer

Landon should report an accrued liability of $200,000, which is the deductible amount they are responsible for, as the insurance is expected to cover the rest.