Multiple Choice
Z Co.filed suit against W Inc.in 2016 seeking damages for patent infringement.At December 31,2016,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 2017.Z should report this award in its 2016 financial statements,issued in March 2017 as:
A) A receivable and deferred 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.
Correct Answer:
Verified
Correct Answer:
Verified
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