The Commonwealth of Virginia filed suit in October 2022 against Northern Timber Corporation, seeking civil...
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The Commonwealth of Virginia filed suit in October against Northern Timber Corporation, seeking civil penalties and injunctive relief for violations of environmental laws regulating forest conservation. When the financial statements were issued in Northern had not reached a settlement with state authorities, but legal counsel advised Northern Timber that it was probable the ultimate settlement would be $ in penalties. The following entry was recorded: General Journal Debit Credit Losslitigation Liabilitylitigation Late in a settlement was reached with state authorities to pay a total of $ to cover the cost of violations. Required: Prepare any journal entries related to the change. Would a disclosure note be required for the change in estimate?
The Commonwealth of Virginia filed suit in October against Northern Timber Corporation, seeking civil penalties and injunctive relief for violations of environmental laws regulating forest conservation. When the financial statements were issued in Northern had not reached a settlement with state authorities, but legal counsel advised Northern Timber that it was probable the ultimate settlement would be $ in penalties. The following entry was recorded:
General Journal Debit Credit
Losslitigation
Liabilitylitigation
Late in a settlement was reached with state authorities to pay a total of $ to cover the cost of violations.
Required:
Prepare any journal entries related to the change.
Would a disclosure note be required for the change in estimate?
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