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    Nov 15, 2010, 11:23 PM
    Intermediate accounting 3 litigation settlement journal entry
    I need to know what the journal entry was for a settlement of free repairs in a class lawsuit, by looking at the income statement.

    What the settlement provides: In addition to free repairs, the Settlement Agreement makes available three categories of benefits to Class Members. The 1st is Repair Reimbursement; the 2nd is Replacement Cost; and the 3rd is Purchase Certificates.

    Problem: Refer 2 company's income statement for fiscal 2004. What journal entry did company record to account for the front-load washer settlement during 2004?

    Above Operating Income in Inc. statement is "Front-load washer litigation" yr ended amount of $33,500. Below Operating Income is "Adverse judgement on pre-acquisition distributor lawsuit" yr ended amount of $(10,505). This is the all I see related to settlement.

    I don't know what is to be debited or credited and for what amount. Obviously, the numbers don't match up, but the question doesn't say the amount settled.

    Help please!

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