The following three independent sets of facts relate to contingent liabilities: 1. In November of the current year, an automoblle manufacturing company recalled all pickup trucks manufactured during the past two years. A flaw in the battery cable was discovered and the recall provides for replacement of the defective cables. The estimated cost of this recall is $2 million. 2. The EPA has notified a company of violations of environmental laws relating to hazardous waste. These actions seek cleanup costs, penalties, and damages to property. The company is reasonably certain there will be cost assoclated with the cleanup, but cannot estimate the amount. The cleanup cost could be as high as $4,000,000 or as little as $500,000, and insurance could reimburse all or part of the cost. There is no way to more accurately estimate the cost to the company at this time. 3. Holland Company does not carry property damage insurance because of the cost. The company has suffered substantial losses each of the past three years. However, it has had no losses for the current year. Management thinks this is too good to be true and is sure there will be significant losses in the coming year. However, the exact amount cannot be determined. Required a. What are three categories of contingent liabilities? b. For each item in the preceding list, determine the correct accounting treatment. Prepare any required joumal entries. Complete this question by entering your answers in the tabs below. What are three categories of contingent Habilities? Cunplete this question by entering your answers in the tahs below, For each item in the penceding list, determine the correct accounting treatment. Prepare any required jouthat entries, (if no untry is required for a transection/evont, splect "No fournal entry iequired" in the first account field Enter your answers in dollars rather thati inilisions, (For exampie, 5,000,000 rather than 5 million.)) Journal entry worksheet Mote: Enter debits before credita. Journal entry worksheet C Record the fines associated with the vlolations of environmental laws for event 2+ NGte: Enter debits befisen redits. Record the current year losses for property damage in event 3. Note: Enter debits before credits