(Solution) - Roden Security Systems revenues for 2010 totaled 6 3 million A -(2025 Original AI-Free Solution)

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Roden Security Systems revenues for 2010 totaled $6.3 million. As with most companies, Roden is a defendant in lawsuits related to its products. Note 14 of the Roden Annual Report for 2010 reported:

Requirements
1. Suppose Roden?s lawyers believe that a significant legal judgment against the company is reasonably possible. How should Roden report this situation in its financial statements?
2. Suppose Roden?s lawyers believe it is probable that a $1.5 million judgment will be rendered against the company. Report this situation in Roden?s financial statements.
Journalize any entry requirements by GAAP. Explanations are not required.