Z Co. filed suit against W, Inc. in 2011 seeking damages for patent infringement. At December 31, 2011, legal counsel for Z believed that it was probable that Z would be successful against W for an estimated amount in the range of $30 million to $60 million, with each amount in that range considered equally likely. Z was awarded $40 million in April 2012. Z should report this award in its 2011 financial statements, issued in March, 2012 as
A. A receivable and unearned revenue of $40 million.
B. A receivable and revenue of $40 million.
C. A disclosure of a gain contingency of $40 million.
D. A disclosure of a gain contingency of an undetermined amount in the range of $30 million to $60 million.
Answer: D
If the answers is incorrect or not given, you can answer the above question in the comment box. If the answers is incorrect or not given, you can answer the above question in the comment box.