Analyze the following independent situations.
a. Sophia, Inc. is being sued by a former employee. Sophia believes that there is a remote chance that the employee will win. The employee is suing Sophia for damages of $5,000.
b. Oro Oil Refinery had a gas explosion on one of its oil rigs. Oro believes it is likely that it will have to pay environmental clean-up costs and damages in the future due to the gas explosion. Oro cannot estimate the amount of the damages.
c. Lucky Enterprises estimates that it will have to pay $30,000 in warranty repairs next year.
Determine how each contingency should be treated.