Specialty Producers is involved in two product liability lawsuits and a third lawsuit that the company brought against a competitor for patent infringement.At December 31, 2018, the company's attorney informed management of the following:

1.It is probable that Specialty will lose one of the product liability lawsuits, although the actual settlement could be as low as $800,000 or as hight as $2,000,000, with no one estimate more likely than the other within this range.

2.It is possible that the company could lose $1,000,000 in the second product liability lawsuit.

3.It is probable that Specialty will win $500,000 in the patent infringement case.

What should Specialty report on its December 31, 2018 balance sheet for these contingencies?

$300,000 contingent liability

$800,000 contingent liability

$1,800,000 contingent liability

$3,000,000 contingent liability