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Company K is sued by its supplier for breach of contract. The supplier seeks a legal payment of 200,000,000. After reviewing the facts and circumstance,

Company K is sued by its supplier for breach of contract. The supplier seeks a legal payment of 200,000,000. After reviewing the facts and circumstance, the attorney of Company K believes that Company K has a remote probability of losing the lawsuit. Given the facts, Company K should record:

  • A. no loss contingency but disclose a contingency of $200,000,000 in the footnote.
  • B. a loss contingency of $200,000,000 and disclose in the footnote.
  • C. a loss contingency of $200,000,000.
  • D. no loss contingency and no disclosure in the footnote.

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