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14. Contingencies The company is involved in various legal proceedings. ... It is the Company's policy to accrue for amounts related to these legal matters if it is probable that a liability has been incurred and an amount is reasonably estimable. 1. Suppose Pine's lawyers believe that a significant legal judgment against the company is reasonably possible. How should Pine report this situation in its financial statements? 2. Suppose Pine's lawyers believe it is probable that a $2.1 million judgment will be rendered against the company. In general terms, how would this situation be reported in Pine's financial statements (using U.S. GAAP)? Pine Systems' revenues for 2018 totaled $27.1 million. As with most companies, Pine is a defendant in lawsuits related to its products. Note 14 of the Pine annual report for 2018 reported the following: i (Click the icon to view the note.) Read the fequirements Requirement 1. Suppose Pine's lawyers believe that a significant legal judgment against the company is reasonably possible. How should Pine report this situation in its financial statements? First, let's decide how the lawsuit should be reported in the financial statements. The lawsuit should he lawsuit should be reported by accruing a liability be reported by accruing a liability and including a note be reported by including a note similar to Note 14 not be reported ick to select your