Exercise $13-21($Algo$)$ Various transactions involving contingencies; financial statement effects $[$LO$13-5,13-6]$

The following selected circumstances relate to pending lawsuits for Erismus, Incorporated Erismus$$s fiscal year ends on December $31.$ Financial statements are issued in March $2025.$ Erismus prepares its financial statements according to U$.$S$.$ GAAP.

Required:

Indicate the amount Erismus would record as an asset, a liability or if no accrual would be necessary in the following circumstances.

Erismus is defending against a lawsuit. Erismus's management believes the company has a slightly worse than $50/50$ chance of eventually prevailing in court, and that if it loses, the judgment will be $$1,890,000.$

Erismus is defending against a lawsuit. Erismus's management believes it is probable that the company will lose in court. If it loses, management believes that damages could fall anywhere in the range of $$2,970,000$ to $$5,940,000,$ with any damage in that range equally likely.

Erismus is defending against a lawsuit. Erismus's management believes it is probable that the company will lose in court. If it loses, management believes that damages will eventually be $$5,310,000,$ with a present value of $$3,717,000.$

Erismus is a plaintiff in a lawsuit. Erismus's management believes it is probable that the company eventually will prevail in court, and that if it prevails, the judgment will be $$1,890,000.$

Erismus is a plaintiff in a lawsuit. Erismus$$s management believes it is virtually certain that the company eventually will prevail in court, and that if it prevails, the judgment will be $$646,000.$