Unformatted text preview: predicted. 3. Bowe-Whitney is the defendant in a lawsuit filed in January 2014 in which Access Company seeks $10 million as an adjustment to the purchase price related to the sale of Bowe-Whitney's hardwood division in 2013. The lawsuit alleges that Bowe-Whitney misrepresented the division's assets and liabilities. Legal counsel advises that it is reasonably possible that Bowe-Whitney could lose $5 million, but that it's extremely unlikely it could lose the $10 million asked for. 4. At March 1, 2014, the EPA is in the process of investigating the possibility of environmental violations at one of Bowe-Whitney's sites, but has not proposed a penalty assessment. Management feels an assessment is reasonably possible, and if an assessment is made, a settlement of up to $33 million is probable. Required: Prepare journal entries that should be recorded as a result of each of the above contingencies....
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- Winter '11
- Balance Sheet, Bowe-Whitney Inc