Unformatted text preview: 3. Contingent Liabilities and Subsequent Events Memorandum AppleBlossom Cologne Company G-7 Contingent Liabilities and Subsequent Events 2--5-04 December 31, 2003 JWP Inquiry was made of Mr. Lancaster, President, Mr. Shelton, Controller, and Ms. Stockton, Treasurer, concerning possible contingent liabilities and events occurring subsequent to the balance sheet date that may require accrual or disclosure in the financial statements. The only matter discovered is litigation described by the client's legal counsel, Edwards, Overstreet, and Gilley, in their letter to us (schedule (A.L./G -5)). The client is a defendant in a product liability suit. The attorneys are of the opinion that the client will not prevail in this action. However, the amount is not susceptible of reasonable estimation. According to counsel, it appears that the judgment against AppleBlossom will be much less than the $100,000 damages...
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This note was uploaded on 11/01/2011 for the course ACCT 2301 taught by Professor Lewis during the Spring '09 term at Husson.
- Spring '09