Speedy Motors, a motorcycle manufacturer, had the following contingencies. 

a. Speedy Motors estimates that it is reasonably possible but not likely that it will lose a current lawsuit. Speedy Motors’ attorneys estimate the potential loss will be $3,500,000. 

b. Speedy Motors received notice that it was being sued. Speedy Motors considers this lawsuit to be frivolous. 

c. Speedy Motors is currently the defendant in a lawsuit. Speedy Motors believes it is likely that it will lose the lawsuit and estimates the damages to be paid will be $85,000. Determine the appropriate accounting treatment for each of the situations Speedy Motors is facing.