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Reporting Contingent Liabilities

James Soda is a regional soda manufacturer. James is currently facing three lawsuits, summarized below:

a$.$ A customer is suing James for $$1$ million because he claims to have found a piece of glass in his soda. Management deems the

probability that James will lose the lawsuit and have to pay $$1$ million as reasonably possible.

b$.$ An employee is suing James for $$500,000$ for an injury she incurred in the parking lot while walking to work Management deems the

probability that James will lose the lawsuit as probable but estimates that a reasonable payout will be $$100,000,$ not $$500,000.$

c$.$ A customer is suing James for $$300,000$ because her last name is James and she claims James stole her name. Management deems

the probability that James will lose the lawsuit and have to pay $$300,000$ as remote.

Required:

How should James report each of the lawsuits in its financial statements and footnotes?