Walt's always been a rather shy person. He gets along well with his co-workers and has a few friends; however, he finds himself with little to do on the weekends and is beginning to feel lonely. At the grocery store, Walt notices a flyer from the local animal shelter not far from his house. When he gets home, Walt decides to call the shelter to ask about volunteering. This suggests that Walt is experiencing balance in the dimension of his life.

The following legal claims exist for m. finger co. identify the accounting treatment for each claim as either (a) a liability that is recorded or (b) an item described in notes to its financial statements. 1. m. finger (defendant) estimates that a pending lawsuit could result in damages of $1,250,000; it is reasonably possible that the plaintiff will win the case. an item described in notes to its financial statements. a liability that is recorded. 2. m. finger faces a probable loss on a pending lawsuit; the amount is not reasonably estimable. a liability that is recorded. an item described in notes to its financial statements. 3. m. finger estimates damages in a case at $3,500,000 with a high probability of losing the case. an item described in notes to its financial statements. a liability that is recorded. the amount that m. finger co. should record in its accounting records related to these suits is: