Violations of Environmental Laws Assignment | Top Universities

The Commonwealth of Virginia filed suit in October 2016 against Northern Timber Corporation, seeking civil penalties and injunctive relief for violations of environmental laws regulating forest conservation. When the 2017 financial statements were issued in 2018, Northern had not reached a settlement with state authorities, but legal counsel advised Northern Timber that it was probably the ultimate settlement would be $1,056,000 in penalties. The following entry was recorded: Credit General Journal Loss-litigation Liability-litigation Debit 1,056,000 1,056,000 Late in 2018, a settlement was reached with state authorities to pay a total of $644,000 to cover the cost of violations.

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Required: 1. Prepare any journal entries related to the change. 2. Would a disclosure note be required for the change in the estimate? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare any journal entries related to the change. (If no entry is required for a transaction/event, select “No journal entry required” in the first account field.) View transaction list Journal entry worksheet Record revision to the liability on the basis of the new estimate. Note: Enter debits before credits. Event General Journal Debit Credit Record entry Clear entry View general journal Required 1 Required 2 Would a disclosure note be required for the change in the estimate? Disclosure note be required for the change in estimate Yes < Required 1 Required 2 > Get Accounting Homework Help Today.


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