Hornets Company manufacturer of electronic greeting cards has had a… Hornets Company manufacturer of electronic greeting cards has had a lawsuit filed against it by CHO Company, another manufacturer of electronic greeting cards. The suit alleges patent right infringements by Hornets Company and asks for compensatory damages. For the following likely situation, determine how hornets company should report the information concerning the lawsuit:Input: A – if Accrue and Disclose D – if disclose I – if Ignore Hornets company’s legal counsel estimates that the case may result in a loss of P1,000,000 but considers the likelihood of losing the case as remote. Hornets company’s legal counsel estimates that the case may result in a loss of P1,200,000 but considers the likelihood of losing the case as reasonably possible Hornets company’s legal counsel is convinced that the likelihood of losing the case is probable, the potential amount of the loss, however, is currently undeterminable Hornets company’s legal counsel is convinced that the likelihood of losing the case is probable, the potential amount of the loss is estimated to be P1,150,000 Hornets company’s legal counsel is convinced that the likelihood of losing the case is probable, the potential amount of the loss, based on reliable evidences would be as follows: 20% that the liability would be P1,000,000; 50% that the liability would be at P1,200,000; 30% that the liability would be P1,700,000 Hornet company’s legal counsel is convinced that the likelihood of losing the case is probable, the potentials amount of the loss, based on reliable evidences would be around P1,500,000 to P2,500,000. Accounting Business Financial Accounting ACC 101
