Question 2.a Diamond Bhd was sued by its competitor for patent infringement in October 2018. Its...

Question 2.a

Diamond Bhd was sued by its competitor for patent infringement in October 2018. Its legal advisors had determined that it is probable that Diamond Bhd will lose the case and the estimated amount of damages will be RM300,000.

Required:

Briefly explain how the damages should be reported on the statement of financial position of Diamond Bhd as of 31 December, 2018.

Question 2.b

Pearl Bhd acquired a piece of land from Dane Bhd for RM900,000 in August 2018. In November 2018, it was discovered that the land was contaminated. As a result, Pearl Bhd sued Dane Bhd for RM100,000. The legal advisors of Pearl Bhd believe that this is 80% chance of winning the case.

Required:

Discuss how Pearl Bhd should account for this lawsuit in its statement of its statement of financial position as of 31 December 2018.

Expert Solution

ekkarill92 answered 1 year ago

1. In late 2018, Macrosoft Company was sued for patent infringement related to a new software...

1. In late 2018, Macrosoft Company was sued for patent infringement related to a new software product. At year-end, the company’s attorney advises that a loss is probable under this lawsuit, but it is not currently possible to reasonably estimate such amount. a. What treatment would this contingent liability receive in the company’s December 31, 2018 financial statement? b. Assume the same facts as above, but assume that this lawsuit was settled for $5 million after the end of the...

3.) During the year, Kingbird was sued by a competitor for a patent violation. The competitor...

3.) During the year, Kingbird was sued by a competitor for a patent violation. The competitor is claiming that Kingbird’s liability is $2,400,000. Kingbird’s attorneys have advised it that it is probable that the court will find for the company’s competitor. The attorneys estimate that the liability under the suit could be as little as $96,000 or as much as $480,000. The attorneys do not believe any amount within this range is a better estimate of Kingbird’s liability than any...

Problem C, Contingencies Z Corp. filed a claim for patent infringement against M Corp. in October...

Problem C, Contingencies Z Corp. filed a claim for patent infringement against M Corp. in October 2020. In preparing its financial statements for the year ending December 31, 2020, M Corp. financial accounting group obtained the following information related to this claim: • M Corp’s Risk Management Department believes that M will incur a loss from this lawsuit. They estimate the loss will be in a range from $15 million to $20 million, but cannot give a more precise estimate....

Rich Networks Inc. is being sued by a competitor for infringing on one of its competitor's...

Rich Networks Inc. is being sued by a competitor for infringing on one of its competitor's patents. The company’s fiscal year end date is December 31. The suit for $95,000 was filed in court on January 30, 2020 before the company expects to submit its 2019 annual report to its regulatory body on February 25, 2020. The company’s legal counsel estimates that the likelihood of damages being awarded to the competitor is 80%. How much contingent liabilities, if any, should...

P21.3 Leader Enterprises Ltd. follows IFRS and has provided the following information: In 2019, Leader was sued in a patent infringement suit, and in 2020, Leader lost the court case. Leader must now pay a competitor $50,000 to settle the suit. No previo

P21.3 Leader Enterprises Ltd. follows IFRS and has provided the following information: In 2019, Leader was sued in a patent infringement suit, and in 2020, Leader lost the court case. Leader must now pay a competitor $50,000 to settle the suit. No previoP21.3 Leader Enterprises Ltd. follows IFRS and has provided the following information:In 2019, Leader was sued in a patent infringement suit, and in 2020, Leader lost the court case. Leader must now pay a competitor $50,000 to settle the...

Last week, a small company based in Texas won its patent infringement lawsuit against Nintendo of...

Last week, a small company based in Texas won its patent infringement lawsuit against Nintendo of America. The jury awarded iLife Technologies $10 million in damages when it decided that Nintendo's Wii controllers infringe on iLife's six patents on motion-sensing technology. iLife filed the federal patent lawsuit against Nintendo in 2013, asking for $144 million. The suit stated that Nintendo's Wii and Wii U controllers use accelerometers to track how a player is moving their hands relative to their environment,...

Ruby Bhd has been sued by its supplier due to breach of contract. Discuss whether a...

Ruby Bhd has been sued by its supplier due to breach of contract. Discuss whether a liability can be recognized assuming that: a) It is probable that Ruby Bhd would be liable for RM500,000 as a result of lawsuit; b) It is not probable that Ruby Bhd would be liable for RM500,000. c) It is probable that Ruby Bhd would be liable, however the legal advisors could not estimate the liability amount reliably.

Scorpion Industries had one patent recorded on its books as of January 1, 2018. This patent...

Scorpion Industries had one patent recorded on its books as of January 1, 2018. This patent had a book value of $210,000 and a remaining useful life of 7 years. During 2018, Scorpion brought a patent infringement suit against a competitor. On October 1, 2018, Scorpion received the goods news that its patent was valid and that its competitor could not use the process Scorpion had patented. The company incurred $90,000 to defend this carrying value of the patent. Compute...

Question 2: In October 2018 marijuana became legal in Canada, and since then marijuana is legal...

Question 2: In October 2018 marijuana became legal in Canada, and since then marijuana is legal for adults to own and use it. As it became legal some Canadians invested in growing marijuana and some retail stores opened to sell this product. Use the AS-AD model in the SR to discuss the impact of this policy on the short-run and long-run equilibrium in Canada. Use the AS-AD model in the LR to discuss the impact of this policy on the...

QUESTION 2 Novus Sdn. Bhd is an interior design company. Its directors are Nobi, Dori, Ita...

QUESTION 2 Novus Sdn. Bhd is an interior design company. Its directors are Nobi, Dori, Ita and Moon. Nobi is the managing director of the company. Together the directors hold 30% of the company shares. Recently the directors of Novus Sdn. Bhd. discover that Lotus Bhd. is making a bid to take over Novus Sdn. Bhd. by purchasing majority shares in the company. It is rumoured that Lotus Bhd. plans to remove Novus Sdn. Bhd.’s directors once it gains control...

Question