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2 At April 1, 2022, the Food and Drug Administration is in the process of investigating allegations of false marketing claims by Hulkly Muscle Supplements.

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2 At April 1, 2022, the Food and Drug Administration is in the process of investigating allegations of false marketing claims by Hulkly Muscle Supplements. The FDA has not yet proposed a penalty assessment. Hulkly's fiscal year ends on December 31, 2021. The company's financial statements are issued in April 2022 Required: For each of the following scenarios, determine the appropriate way to report the situation, 1. Management feels an assessment is reasonably possible, and if an assessment is made, an unfavorable settlement of $13 milionis reasonably possible 2. Management feels an assessment is reasonably possible, and if an assessment is made, an unfavorable settlement of $13 million is probable 3. Management feels an assessment is probable, and if an assessment is made, an unfavorable settlement of $13 million is reasonably possible 4. Management feels an assessment is probable, and if an assessment is made, an unfavorable settlement of $13 million is probable, DOM ces 1. an assessment is made, an unfavorable settement of $13 million is reasonably possible 2. If an assessment is made, an unfavorable sottioment of $13 million is probable 3. If an assessment is made, an unfavorable settlement of $13 million is reasonably possible 4 an assessment is made an unfavorable selement of $13 million is probable A disclosure note is required. Accrual and disclosure of the loss is required. No disclosure is required

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