2. The fieldwork for the December 31, 2013 audit of Schmidt Corporation ended on March 17, 2014. The financial statements and auditor's report were issued on March 29, 2014. In each of the material situations (1 through 5) below, indicate the appropriate action (a, b, c). (2 points each)The possible actions are as follows: Adjust the December 31, 2013 financial statements. Only disclose the information in a footnote in the December 31, 2013 financial statements (with no adjusting entry), No action is required. a. b. c. The situations are as follows: 1. On March 1, 2014, one of Schmidt Corporation's major customers decla bankruptcy. The customer's financial condition in 2013 was deteriorating and they owed Schmidt Corporation a large sum of money as of the balance sheet date. 2. On February 17, 2014, Schmidt Corporation engaged in a merger with another company, 3. On January 20, 2014, the client was sued for negligence because of an employe that was hurt the prior year while on the job. Their attorneys believe, it is probable that they will have to pay at least 5 million dollars in liability. 4.On March 10, 2014, the company settled a lawsuit in which it sued a competitor and received a large settlement which it deposited