Question 31 (3 points) Which of the following would appear on the balance sheet as a current liability? A probable loss in the amount of $4 million from a pending lawsuit. O A possible loss in the amount of $4 million from a pending lawsuit. O A probable loss from a pending lawsuit, the amount of which is not yet determinable. O A lawsuit for $4 million for which the likelihood of loss is remote. Question 32 (3 points) Anderson Construction is a defendant in a multi-million dollar lawsuit that was filed in a prior year. The lawsuit was not previously disclosed in the financial statements or accompanying footnotes, as the company has vigorously defended its position and its attorneys initially indicated that the claim was not valid. During the current year, however, the facts and circumstances have changed such that the likelihood of a loss approximating $5 million is now considered reasonably possible. How should Anderson recognize this lawsuit in its current year financial statements? Do nothing, since it was not recognized in previous periods. Do nothing until the matter is settled or a judgment or verdict is obtained. Disclose the matter in the footnotes accompanying the financial statements. Record a contingent liability in the amount of $5 million. Question 35 (3 points) If Edwards Company has current assets of $62,000, total assets of $350,000, current liabilities of $31,000, and total liabilities of $125,000, then the company's current ratio will be 0.5 0 2.0 2.8 3.0