3 Not yet answered Points out of 2.50 Flag question Sandy Shoes Foot Inc. is involved in litigation regarding a faulty product sold in a prior year. The company has consulted with its attorney and determined that it is possible that they may lose the case. The attorneys estimated that there is a 40% chance of losing. If this is the case, their attorney estimated that the amount of any payment would be $800,000. What is the required accounting as a result of this litigation? Select one: a. Debit Litigation Loss for $800,000 and credit Litigation Liability for $800,000. b. Debit Litigation Loss for $320,000 and credit Litigation Liability for $320,000. c. No journal entry is required. The possible loss should be disclosed in the Notes. d. No accounting is required