Sheridan Shoes Foot Inc. is involved in litigation regarding a faulty product sold in a prior year. The company has consulted with its attorney and determined that it is possible that they may lose the case. The attorneys estimated that there is a 45% chance of losing. If this is the case, their attorney estimated that the amount of any payment would be $808000. What is the required journal entry as a result of this litigation?

Debit Litigation Expense for $808000 and credit Litigation liability for $808000.

No journal entry is required.

Debit Litigation Expense for $363600 and credit Litigation Liability for $363600.

Debit Litigation Expense for $444400 and credit Litigation Liability for $444400.

Crane Company, which has a taxable payroll of $785000, is subject to FUTA tax of 6.2% that includes a state contribution rate of 5.4%. However, because of stable employment experience, the companys state rate has been reduced to 2%. What is the total amount of federal and state unemployment tax for Crane Company?

$64370

$91845

$21980

$31400