Hi teacher,can you tell me how to do this question and I have no idea how to do this question.thanks

PROBLEM TWO Mega Company, a public company, is preparing its financial statements for the year ended December 31, 2019. The following situations are being reviewed to determine the appropriate accounting treatment: (A - 4) 1. Mega is being sued for $3 million by an employee who was injured on the job in February 2019. It is likely that the company will lose this lawsuit, but a reasonable estimate cannot be made of the amount of the expected settlement. 2. On December 2, 2019, a potential customer injured himself when he slipped on the floor in the foyer of Mega Company's office building. Mega Company did not have appropriate floor mats in place and melting snow from the customer's boots made the floor very dangerous. Mega has negotiated a potential settlement of $200,000 with the individual's lawyer. Instructions A. For each of the above situations, recommend whether Mega Company should (1) record a provision in its December 31, 2019, financial statements; (2) disclose the situation in the notes to the financial statements; or (3) not report it. Provide a rationale for your recommendations. B. Fully explain ONE potential benefit and fully explain ONE potential_cost of recording a provision for a contingency as opposed to only disclosing it in the notes to the financial statements. (T - 4)