Question 9 (3 points) Your company (ABC) believes that a competitor is inappropriately using patents developed by ABC and sues them. A court awarded your company $1.5M in damages in November of Year 4, but the other company is appealing and you do not know for sure what will happen as it is likely to take 2 years to be settled. Your lawyer thinks your company is reasonable to assume the company will get 800,000 to $1.1 M with $1M considered the most likely. It will cost the company at least 100,000 to defend in court in future years. How should ABC handle this in the financial Statements Dated December 31, Year 4? Show the 100,000 as a loss; show none of the gain. Accrue a $700,000 net gain ($800,000 less $100,000 costs of defense) in Year 4. Put the remaining $300,000 of possible gains in the footnotes. Report the estimated amounts of gain and costs of future defense only as descriptive footnotes. Accrue the $100.000 of legal costs and the $800,000 of gain in the Year 4 income statement as two separate items