Fernandez Motors, a motorcycle manufacturer, had the following contingencies. Determine the appropriate accounting treatment for each of the situations Fernandez is facing. a. Fernandez estimates that it is reasonably possible but not likely that it will lose a current lawsuit. Fernandez's attorneys estimate the potential loss will be $3,200,000 b. Fernandez received notice that it was being sued. Fernandez considers this lawsuit to be frivolous c. Fernandez is currently the defendant in a lawsuit. Fernandez believes it is likely that it will lose the lawsuit and estimates the damages to be paid will be $60,000 Fernandez Motors, a motorcycle manufacturer, had the following contingencies. Determine the appropriate accounting treatment for each of the situations Fernandez is facing. a. Femandez estimates that it is reasonably possible but not likely that it lose a current laws Describe the situation in a note to the financial statements. Fernandez's attorni estimate the potent Do not disclose loss will be $3,200 Fernandez receiver Record an expense and a liability based on estimated amounts. notice that it was being sued. Fernandez considers this lawsuit to be frivolous Fernandez is currently the defendant in a lawsuit. Fernandez believes it is likely that it will lose the lawsuit and estimates the damages to be paid will be $60.000