Current Liabilities and Contingencies Part A: The following selected circumstances relate to pending lawsuits for CheChee, Inc. CheChee's fiscal year ends on December 31. Financial statements are issued in March 2020. CheChee prepares its financial statements according to U.S. GAAP. Required: Indicate the amount of asset or liability that CheChee would record, and explain your answer. 1. CheChee is defending against a lawsuit. CheChee's management believes the company has a slightly worse than 50/50 chance of eventually prevailing in court, and that if it loses, the judgment will be $1,000,000. 2. CheChee is defending against a lawsuit. CheChee's management believes it is probable that the company will lose in court. If it loses, management believes that damages could fall anywhere in the range of $2,000,000 to $4,000,000, with any damage in that range equally likely. 3. CheChee is defending against a lawsuit. CheChee's management believes it is probable that the company will lose in court. If it loses, management believes that damages will eventually be $5,000,000, with a present value of $3,500,000. 4. CheChee is a plaintiff in a lawsuit. CheChee's management believes it is probable that the company eventually will prevail in court, and that if it prevails, the judgment will be $1,000,000. 5. CheChee is a plaintiff in a lawsuit. CheChee's management believes it is virtually certain that the company eventually will prevail in court, and that if it prevails, the judgment will be $500,000 Part B: Indicate (by letter) the way each of the items listed below should be reported in CheChee's balance sheet at December 31, 2019. Item Current Long- Disclosur Not Liability Term e Note Reporte Liabilities d 1 Customer advances 2 Accounts payable LT bonds that will be callable by the creditor in the upcoming year unless an existing violation is not corrected (there is a reasonable possibility the violation will be corrected within the grace period) A note due March 3, 2021 Interest accrued on note, Dec 31, 2019 ST bank loan to be paid with proceeds of sale of accounts receivable Note Payable due April 4, 2020 Unasserted assessment of back taxes with a reasonable probably of being asserted, in which case there would probably be a loss in 13 months 9 10 year Mortgage due in 2025... monthly payments are $10,000 A definitely determinable gain that is O contingent on a future event that appears extremely likely to occur in the three months