Winter Co

Subject:AccountingPrice:3.87 Bought7

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Winter Co. is being sued for illness caused to local residents as a result of negligence on the company's part in permitting the local residents to be exposed to highly toxic chemicals from its plant. Winter's lawyer states that it is probable that Winter will lose the suit and be found liable for a judgment costing Winter anywhere from P1,200,000 to P6,000,000. However, the lawyer states that the most probable cost is P3,600,000. As a result of the above facts, Winter should accrue

a. a loss contingency of P1,200,000 and disclose an additional contingency of up to P4,800,000.

b. a loss contingency of P3,600,000 and disclose an additional contingency of up to P2,400,000.

c. a loss contingency of P3,600,000 but not disclose any additional contingency.

d. no loss contingency but disclose a contingency of P1,200,000 to P6,000,000.