Your answer is partially correct. Sheridan Corporation, in preparation of its December 31, 2020, financial statements, is attempting to determine the proper accounting treatment for each of the following situations. 1. As a result of uninsured accidents during the year, personal injury suits for $344,500 and $60,200 have been filed against the company. It is the judgment of Sheridan's legal counsel that an unfavorable outcome is unlikely in the $60,200 case but that an unfavorable verdict approximating $273,200 will probably result in the $344,500 case. 2. Sheridan owns a subsidiary in a foreign country that has a book value of $6,102,000 and an estimated fair value of $9,884,000. The foreign government has communicated to Sheridan its intention to expropriate the assets and business of all foreign investors. On the basis of settlements other firms have received from this same country, Sheridan expects to receive 30% of the fair value of its properties as final settlement. 3. Sheridan's chemical product division consisting of five plants is uninsurable because of the special risk of injury to employees and losses due to fire and explosion. The year 2020 is considered one of the safest (luckiest) in the division's history because no loss due to injury or casualty was suffered. Having suffered an average of three casualties a year during the rest of the past decade (ranging from $60,200 to $715,900), management is certain that next year the company will probably not be so fortunate. 1. (a) Prepare the journal entries that should be recorded as of December 31, 2020, to recognize each of the situations above. (If no entry is required, select "No Entry" for the account titles and enter for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) No. Date Account Titles and Explanation Debit Credit December Lawsuit Loss 31, 2020 Lawsuit Liability December Loss from Expropriation 31, 2020 Allowance for Expropriation December No Entry 31, 2020 2 IT 3. No Entry