Make any journal entries necessary related to contingent liabilities. See the information below: Darby litigation Red Robin began the year with one pending lawsuit filed by Adam Darby. Darby is an individual that was hurt when riding one of the scooters that Red Robin produced. At the end of the previous year, Red Robin’s attorneys believed that it was highly likely that Red Robin would be found liable and would be responsible for between $38,300 and $105,700. As of December 31, of the current year, the attorneys now believe it is less likely that they will lose the case. The attorneys believe that Red Robin has approximately an 11% chance to win. They have re-estimated the potential payout to be between $40,100 and $127,400. The attorneys anticipate that it will be several more years before this litigation is settled.

In September, Amina hired Bryan as a delivery man. Bryan was to commence work on 1 November. On 1 October, Amina wrote to Bryan telling him that, despite their agreement, economic circumstances were such that she no longer required his services. Can Bryan sue Amina? Explain your answers in light of the principles learned on breach of contract. (maximum 500 words)

Julie Andrews was severely injured after she fell into an open manhole in the city. She is suing the Department of Roadworks. Testimony was provided in the trial that Julie will be unable to work for five years. The jury is considering the damages that should be awarded to Julie and will include the following: (a) The present value of the last two years' pay. Julie Andrews' annual salary for the last two years would have been $53,000 and $56,000, respectively. (b) The present value of five years' future salary. Julie Andrews' salary is assumed to be $59,000 per year. 4 (c) $180,000 for her injuries. (d) $25,000 for her legal costs. Assume that her salary is paid in equal amounts at the end of each month. The interest rate is an effective annual rate of 11 percent. What is the dollar value of the damages payment to Julie Andrews? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Award

Skip rented an office building to Chris for $1,000 per month. On December​ 29, 2018​, Skip received a deposit of $7,000 in addition to the first and last​ months' rent. Occupancy began on January​ 2, 2019. On July​ 15, 2019​, Chrisclosed his business and filed for bankruptcy. Skip had collected rent for​ February, March, and April on the first of each month. Skip had received May rent on May​ 10, but collected no payments afterwards. Skip withheld $1,000 from the deposit because of damage to the property and $500 for unpaid rent. He refunded the balance of the deposit to Chris.   Requirement What amount would Skip report as gross income for2018​? for 2019​?   Begin by selecting the labels to show the items that will comprise Skip​'s 2018 gross​ income, and then enter the amounts to compute the 2018 gross income amount. ​(If an input field is not​ used, leave the input​ field(s) empty; do not select a label or enter a​ zero.)   Taxable item 2018 Gross income…

On July 1, 2020, Ben entered a litigation case with Yona over unauthorized use of Yona’s latest technology. On September 1, 2020, Ben’s lawyers estimated that there is a 70% probability that Ben will lose in the next hearing that will be held on February 2, 2021. Ben stood to pay a maximum of $1,000,000 penalty by the court if proven guilty. Instructions: a. Why should Ben report this case on its Statement of financial position? b. How is the impact of this litigation Ben’s financial statement for 31 December 2020? c. If, October 15, 2020, the legal team finds new evidence for the claim against Ben, and revise the likelihood of Ben winning the case to 70%, how should this be shown in the financial statements?

Malky is manager of York Steel Ltd. His contract is for 10 years. In the third year Malky enters into a restrictive covenant which provides that during the remainder of his contract he must not reveal or use confidential information other than to his employer. It further provides that he must not work for a competitor during the remainder of the employment agreement. Consideration for entering into the agreement is $40,000. Is this capital or income in Malky’s hands?

In an insurance settlement for a physical injury, a court awarded Ms. Stevenson $100,000 for past two years' loss of wages of $4000 per month plus interest on the lost wages to the end of the two years. What effective rate of interest has the court allowed on the lost wages?

On Nov. 5, 2016, a Fudge Corp. truck was in an accident with an auto driven by Paul. Fudge received notice on January 15, 2017 of a lawsuit for P 700,000 damages for personal injuries suffered by Paul . The entity's counsel believed it is probable that Paul will be awarded an estimated amount in the range between P 200,000 and P 450,000 and no amount is a better estimate of potential liability than any other amount because each point in the range is as likely as any other. The 2016 financial statements were issued on March 1, 2017. What amount of loss should be accrued on Dec. 31, 2016?

Phoebe sued Phyllis and was granted judgment on October 25, Year 1, totaling $9,741.62 inclusive of the judgment, prejudgment interest and costs. Postjudgment interest in accordance with the CJA rate of 3% per year was awarded. It is now May 15, Year 2. Year 2 is a leap year. What does Phyllis owe including post judgment interest?''

Laura sold her office building to the accounting firm that bought her firm. Unfortunately, she had to repossess the building after less than a year. Choose the response that correctly states the amount of Laura's gain or loss on the repossessed real property, based on the following facts. The building had a fair market value of $54,000 on the date of repossession. The unpaid balance of the installment obligation at the time of repossession was $56,000, the gross profit percentage was 25%, and the costs of repossession were $600. (a) Loss of $13,400 (b) Loss of $11,400 (c) Gain of $11,400 (d) Gain of $13,400