Lorange AG became involved in a lawsuit with a government agency. The company's legal counsel indicates that there is a 65 percent likelihood that the company will lose this dispute and estimates that the amount the company will have to pay is between $500,000 and $700,000, with all amounts in that range being equally likely. Under U.S. GAAp, what amount, if any, should Lorange recognize as a liability related to this lawsuit?

A $700,000

B $500,000

C $0

D $600,000