Using us gaap and ifrs

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In 2013, Slim Drug Company began to notice problems with its obesity drug. The company stopped selling the drug near the end of 2013. In the last six months of 2014, the company was sued by 1,000 people who had an allergic reaction to the company’s obesity drug. At the end of 2014, the company’s attorneys believe there is a 60% chance the company will need to make payments in the range of $1,000 to $5,000 to settle each claim. At the end of 2015, while none of the cases have been resolved, the company’s attorneys now believe there is an 80% chance the company will need to make payments in the range of $2,000 to $7,000 to settle each claim. In 2016, 400 claims were settled at a total cost of $1.2 million. Based on this experience, the company believes 30% of the remaining cases will be settled for $3,000 each, 50% will be settled for $5,000 and 20% will be settled for $10,000 each. Using US GAAP and IFRS, show what journal entries would be required in 2013, 2014, 2015 and 2016.

Reference no: EM131288787

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