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much provision should Rasin recognize on December 31, 2020?

- November 14, 2022 - Edwin Tunner

A truck owned and operated by Rasin Company was involved in an accident with an auto driven by Lakasei on December 10, 2020. Rasin Company received notice on December 25, 2020 of a lawsuit for P350,000 damages for a personal injury suffered by Lakasei. The legal counsel of the company believes that it is probable that Rasin will pay the damages ranging between P500,000 to P1,000,000. Each point within that range of amounts is considered as likely as any other point. The financial statements were authorized to be issued on March 1, 2021.

How much provision should Rasin recognize on December 31, 2020?

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