$18.$ a$)$ Your company is the defendant in a lawsuit. Your company$$s management believes it is

reasonably possible that your company will lose the lawsuit and have to pay $$2$ million.

How should the contingent liability be accounted for? $(1$ point$)$

b$)$ Would you change your answer if your company$$s management believes it is probable

that your company will lose the lawsuit and have to pay damages in the range of $$1\mathrm{.}8$ to $$2$

million $($with all amounts in this range considered equally likely$)?$ How should the

contingent liability be accounted for? $(1$ point$)$