The following three independent sets of facts relate to contingent liabilitles: 1. In November of the current year, an automobile manufacturing company recalled all plckup trucks manufactured during the past two years. A flaw In the battery cable was discovered and the recall provides for replacement of the defectlve cables. The estimated cost of this recall is $3.7 million. 2. The EPA has notlfied a company of violations of environmental laws relating to hazardous waste. These actlons seek cleanup costs, penaltles, 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 $4,170,000 or as little as $670,000 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 substantlal 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 categorles of contingent Ilabilitles? b. For each Item In the preceding IIst, determine the correct accounting treatment. Prepare any required journal entrles. Complete this question by entering your answers in the tabs below. What are three categories of contingent liabilities