1. In July last year, Company A's products were sued by Company B for alleged theft of non-patented technology. On December 31st last year, the case was still in the process of trial, and the case was not closed. Under the risk assessment of lawyers, it was considered that Company A was likely to lose the case, and it was estimated that it would need to pay compensation of 3-5 million yuan. If it lost the case, Company A would have to pay legal fees of 3, yuan. If you lose the case, you should make compensation according to the insurance company's agreement. The estimated compensation amount is 2.5 million yuan. Assuming that other factors are not considered, what is the amount of the above-mentioned liabilities that should be confirmed by Company A in the annual report last year?
A: 2.6 million yuan
B: 4.6 million yuan
C: 4.4 million yuan
D: 4.3 million yuan
Analysis:
The amount of estimated liabilities confirmed due to pending litigation = (3 million+5)/2+3 = 4.3 million yuan; In view of the compensation that is likely to be received, it is not necessary to deal with the compensation that has not yet reached the determined standard.
Second, about the estimated liabilities in pending litigation
There are many problems in actual work, such as the quality is not up to standard, the buyer returns and asks for compensation, and the seller does not agree to compensation, so a lawsuit is started. What should be done in accounting at this time? Due to the product quality problem, the estimated liabilities confirmed by the buyer's pending lawsuit for compensation should be deducted from the income tax when it actually occurs, forming deferred income tax, which cannot be directly deducted when it is confirmed.