Problemin may of 2011 daemon financial services became, Ask an Expert

Accounting

Problem:

In May of 2011 Daemon Financial Services became involved in a penalty dispute with the EPA. At December 31, 2013, the environmental attorney for Daemon indicated that an unfavorable outcome to the dispute was probable. the additional penalties were estimated to be $770,000, but could be as high as $1,170,000. After the year-end but before the financial statements for 2013 were issued, Daemon accepted the EPA settlement offer of $900,000. Daemon should have reported an accrues liability on its December 31, 2013 balance sheet of:

$770,000
$900,000
$970,000
$1.170,000
Some other amount ____________ (Enter answer)

Note: Be sure to show how you arrived at your answer.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91164868

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