During 2014, Leucothea Co. became involved in a legal dispute with a supplier. At December...
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During 2014, Leucothea Co. became involved in a legal dispute with a supplier. At December 31, 2014, Leucotheas legal advisor believed that an unfavorable outcome was probable. A reasonable estimate of resulting monetary damages is $100,000 but could be as much as $200,000. Leucothea has legal liability insurance coverage that limits their loss to $80,000. After the 2014 financial statements were issued, Leucothea agreed to settle the case for $125,000. What amount of accrued liability should Leucothea have reported in its December 31, 2014 balance sheet?
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