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How should Marvel report each of the lawsuits

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Reference no: EM132550136

Question - Marvel Soda is a regional soda manufacturer. Marvel is currently facing three lawsuits, summarized below:

1. A customer is suing Marvel for $1 million because he claims to have found a piece of glass in his soda. Management deems the probability that Marvel will lose the lawsuit and have to pay $1 million as reasonably possible.

2. An employee is suing Marvel for $500,000 for an injury she incurred in the parking lot while walking to work. Management deems the probability that Marvel will lose the lawsuit as probable but estimates that a reasonable payout will be $100,000, not $500,000.

3. A customer is suing Marvel for $300,000 because her last name is Marvel and she claims Marvel stole her name. Management deems the probability that Marvel will lose the lawsuit and have to pay $300,000 as remote.

Required - How should Marvel report each of the lawsuits in its financial statements and footnotes?

Reference no: EM132550136

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