Maxwell Corporation Was Involved in a Lawsuit with the EPA

Multiple Choice

Maxwell Corporation was involved in a lawsuit with the EPA alleging inadequate air pollution control facilities at its Granger plant site during 2008. At December 31, 2011, it appeared probable that the EPA would settle for approximately $150,000. This event should be recognized in 2011 as a(n)

A) extraordinary loss.
B) disclosure of a contingency loss only in a note.
C) should not be disclosed or recognized..
D) loss on the lawsuit (operating expense) .