Landon Construction Co

Multiple Choice

Landon Construction Co. carries $10,000,000 comprehensive public liability insurance with a $200,000 deductible clause. A suit for personal injury damages was brought against Landon in 2011. Landon's counsel believes it probable that the insurance company will settle out of court for an estimated amount of $550,000. At December 31, 2011, Landon should report an accrued liability of

A) $550,000.
B) $350,000.
C) $200,000.
D) $0.