Part 3 Contingent liabilities. (10 points possible) Below are three independent situations. 1. In August, 2020 a worker was injured in the factory in an accident partially the result of his own negligence. The worker has sued Simon Co. for $800,000. Counsel believes it is reasonably possible that the outcome of the suit will be unfavorable and that the settlement would cost the company from $250,000 to $500,000. 2. A suit for breach of contract seeking damages of $1,200,000 was filed by an author against Eller Co. on October 4, 2020. Eller's legal counsel believes that an unfavorable outcome is probable. A reasonable estimate of the award to the plaintiff is between $300,000 and $900,000. No amount within this range is a better estimate of potential damages than any other amount. 3. Pratt is involved in a pending court case. Pratt's lawyers believe it is probable that Pratt will be awarded damages of $1,500,000. Instructions Discuss the proper accounting treatment for the 2020 year, including any required disclosures, for each situation. Give the rationale for your answers