A town's garbage trucks accidentally sideswiped two parked automobiles in the year ended December 31,2013.One case was settled for $3,000,and the town expects to pay it in January 2014.In the other case,the claimant originally demanded $15,000.The town attorney thinks they can settle the claim for $10,000,but it probably will take two years to settle the case.What amount should the town report as a claims liability on the General Fund's December 31,2013 balance sheet?
A)$0
B)$3,000
C)$13,000
D)$18,000

Question

Quizplus · Accepted Answer

As of December 31, 2013, the town only has one settled case that they expect to pay in January 2014 for $3,000. Therefore, the claims liability should be reported as $3,000. The other potential settlement that may occur in two years should not be included in the liability until it is actually settled.

A Town's Garbage Trucks Accidentally Sideswiped Two Parked Automobiles in the Year