For each of the independent situations below indicate the appropriate accounting treatment and note disclosure. The company is being sued for patent infringement. Legal counsel believes that the claim is frivolous and that the likelihood of a successful lawsuit is remote. A customer fell on ice outside the company's store. Legal counsel feels that it is only thirty percent likely that a lawsuit will be successful. 1. Record a liability and disclose the situation in the notes. 2. Do not record a liability. Disclose the situation in the notes. A judge has found the company to be liable for an amount of $400,000 for copyright infringement. The company's lawyers feel that an appeal is unlikely to succeed. 3. Do not record a liability. There is no need to disclose the situation in the notes. The company is being sued as a result of selling a product that made its customers sick. Legal counsel believes the lawsuit will be successful but is unable to estimate the amount of damages the company will have to pay. For each of the following independent inventory errors below indicate the effect on reported income/profit for the year ended December 31, 2020. Understatement of ending inventory by the same amount at January 1, 2020 and December 31, 2020. 1. Overstatement of reported income/profit for the year ended December 31, 2020. Overstatement of opening inventory at January 1, 2019. 2. Understatement of reported income/profit for the year ended December 31, 2020. Overstatement of ending inventory at December 31, 2020. 3. No effect on reported income/profit for the year ended December 31, 2020. Overstatement of opening inventory at January 1, 2020