II$.$ Parts A$,$ B$,$ and C all relate to the same underlying situation of the government suing Duncan

Inc. for environmental pollution. Each part provides additional information about the lawsuit's

status in the new year.

A$.$ The government sued Duncan Inc. for environmental pollution. Legal consul determined at

$12-31-21$ it was reasonably possible Duncan might pay damages of $$1,400,000.$

What is the appropriate treatment of this situation at $12-31-21?$ State the reasons for your

recommendation.

B$.$ Legal consul determined at $12-31-22$ it was probable Duncan would lose the lawsuit.

Management estimates damages as low as $$2,500,000$ but can't estimate the high end of the range.

What is the appropriate treatment of this situation at $12-31-22?$ State the reasons for your

recommendation.

C$.$ On $3-2-23$ the jury awarded the government a settlement of $$2,800,000.$ Duncan's $12-31-22$

financial statements were issued $3-14-23.$

What is the appropriate treatment of this situation at $12-31-23?$ State the reasons for your

recommendation.