Sutter Co. is a successful manufacturer of action figures. The company guarantees 100% satisfaction when advertising the action figures to the public. Until recently, Sutter Co. has never been sued by any customer or distributor. However, this year a customer is suing the company for a product defect. As of the end of the year, Sutter Co. does not know whether it will win or lose the suit. Given this unique occurrence, Sutter's management asks you, its CPA, for advice on the proper accounting treatment for this contingency. In a memorandum to your client, Sutter Co., describe the accounting and disclosures for loss and gain contingencies, including guarantees. Type your communication below the line in the response area below