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2.

Atlantic Cruise Lines is a defendant in litigation involving a swimming accident on one of its three cruise ships. Required: 1. The likelihood of a payment occurring is probable, and the estimated amount is $1.12 million. 2. The likelihood of a payment occurring is probable, and the amount is estimated to be in the range of $0.92 to $1.12 million. 3. The likelihood of a payment occurring is reasonably possible, and the estimated amount is $1.12 million. 4. The likelihood of a payment occurring is remote, while the estimated potential amount is $1.12 million. Record the necessary entry for the scenarios given above. (If no entry is required for a particular transaction/event, select "No be entered as 5,500,000.) Computer Wholesalers restores and resells notebook computers. It originally acquires the notebook computers from corporations upgrading their computer systems, and it backs each notebook it sells with a 90 -day warranty against defects. Based on previous experience, Computer Wholesalers expects warranty costs to be approximately 4% of sales. Sales for the month of December are $520,000. Actual warranty expenditures in January of the following year were $19,000. Required: 1. Does this situation represent a contingent liability? 2. \& 3. Record the necessary entries in the Journal Entry Worksheet below. 4. What is the balance in the Warranty Liability account after the entries in Parts 2 and 3