Assume Amazon is involved in a major lawsuit and the probable damages are estimated to be...

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Accounting

Assume Amazon is involved in a major lawsuit and the probabledamages are estimated to be $2,000,000. A. Describe the effectsdamage estimates would have on the financial statements of acorporation and a partnership. B. How do disclosure requirementsdiffer from a corporation to a partnership and what information isrequired? C. Are the shareholders at risk for any personalliability with the company set up as a corporation? Defend yourresponse. D. If your company was set up as a partnership, would thepartners be at risk for personal liability? Defend yourresponse.

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A If Amazon was involved in a major lawsuit any potential losses which could arise would be considered as contingent liability Contingent liabilities are recoreded in the books of accounts only if the contingency is probable and the amount of the liability can be estimated Since here the damages are probable and amount can be estimated potential loss would be recorded in the income statement it meets all See Answer

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