Make any journal entries necessary related to contingent liabilities. See the information below: Darby litigation Red Robin began the year with one pending lawsuit filed by Adam Darby. Darby is an individual that was hurt when riding one of the scooters that Red Robin produced. At the end of the previous year, Red Robin’s attorneys believed that it was highly likely that Red Robin would be found liable and would be responsible for between $38,300 and $105,700. As of December 31, of the current year, the attorneys now believe it is less likely that they will lose the case. The attorneys believe that Red Robin has approximately an 11% chance to win. They have re-estimated the potential payout to be between $40,100 and $127,400. The attorneys anticipate that it will be several more years before this litigation is settled.
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Make any journal entries necessary related to contingent liabilities. See the information below:
Darby litigation
Red Robin began the year with one pending lawsuit filed by Adam Darby. Darby is an individual that was hurt when riding one of the scooters that Red Robin produced. At the end of the previous year, Red Robin’s attorneys believed that it was highly likely that Red Robin would be found liable and would be responsible for between $38,300 and $105,700.
As of December 31, of the current year, the attorneys now believe it is less likely that they will lose the case. The attorneys believe that Red Robin has approximately an 11% chance to win. They have re-estimated the potential payout to be between $40,100 and $127,400. The attorneys anticipate that it will be several more years before this litigation is settled.