urrent Liabilities and Payroll Graded Homework Assignment Several months ago, Ge

Question

urrent Liabilities and Payroll Graded Homework Assignment Several months ago, George Brothers, Inc. experienced a hazardous materials spill at its manufacturing facility. The Environmental Protection Agency (EPA) fined the company $570,000. The company is contesting the fine. Additionally, an employee is suing the company for damages related to the spill. To make matters worse, a nearby homeowner is also suing the company for $364,000 for lost value due to the spill. George Brothers, Inc has secured legal counsel. Their attorney believes that it is probable the EPA find will stand. The attorney has indicated that an out-of-court settlement of $238,000 has been reached with the employee lawsuit. The homeowner's lawsuit is considered to be much weaker of a case and the attorney has indicated that it will likely rule in favor of George Brothers, Inc. Additional litigation is possible due to the spill, but the amounts are uncertain. 5, Prepare the journal entry for the contingent liabilities associated with the hazardous materials spill. Use the account "Damage Awards and Fines" to recognize the expense for the period. a. b. Prepare a disclosure note relating to this incident.

Explanation / Answer

Please hit LIKE button if this helped. For any further explanation, please put your query in comment, will get back to you. a Account Debit Credit Damage Awards and Fine 808000 EPA fine payable 570000 Litigation Claim payable 238000 (Damage awards and fine will be disclosed in Income statement as OTHER Expense) b Several Month ago, company experienced a hazardous material spill at its Manufacturing facility because of which many suits filed against company. Below is status and view point of company: 1. EPA has fined $570000 and company belives that its not company fault however legal counsel belives that payment is probable. 2. In addition, the employee has sued the company. A out of court settlement has been reached with the same. EPA fine and out of court settlement has been recognised as expense 3. There is one another lawsuit related to the event. Counsel believes that case has not merti. Other lawsuit may arise from the is incident

Related Questions

Navigate

• Browse (All)
• Browse U
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.