2 It is a hot August afternoon. The location is the living room in an old Victorian mansion. The 7-foot window is open and the curtains are blowing in the breeze generated by the thunderstorm that just passed. On the floor lie the bodies of Bill and Susie. They are surrounded by puddles of water and broken glass. Please close your eyes and picture the scene. Now change the picture. Neither Bill nor Susie has any clothing on. How did they die

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The following legal claims exist for m. finger co. identify the accounting treatment for each claim as either (a) a liability that is recorded or (b) an item described in notes to its financial statements. 1. m. finger (defendant) estimates that a pending lawsuit could result in damages of $1,250,000; it is reasonably possible that the plaintiff will win the case. an item described in notes to its financial statements. a liability that is recorded. 2. m. finger faces a probable loss on a pending lawsuit; the amount is not reasonably estimable. a liability that is recorded. an item described in notes to its financial statements. 3. m. finger estimates damages in a case at $3,500,000 with a high probability of losing the case. an item described in notes to its financial statements. a liability that is recorded. the amount that m. finger co. should record in its accounting records related to these suits is: