A truck owned and operated by Mingus Company was involved in an accident with an auto driven by S.Nara on January 12,2014.Mingus received notice on April 24,2014,of a lawsuit for $800,000 damages for a personal injury suffered by S.Nara.Mingus's counsel believes it is probable that S.Nara will be successful against the company for an estimated amount in the range between $100,000 and $400,000.No amount within this range is a better estimate of potential damages than any other amount.It is expected that the lawsuit will be adjudicated in the latter part of 2015.What amount of loss should Mingus accrue at December 31,2014?

Question

Quizplus · Accepted Answer

When a loss is probable and the amount can be reasonably estimated but no amount within the range is more likely than any other, the entity should accrue the minimum amount in the range, which is $100,000 in this case.

A Truck Owned and Operated by Mingus Company Was Involved