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Company A filed suit against Company B, seeking damages for patent infringement. Company Bs legal...

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Accounting

Company A filed suit against Company B, seeking damages for patent infringement. Company Bs legal counsel believes it is probable that Company B will settle the lawsuit for an estimated amount in the rage of $50,000 to $100,000, with all amounts in the rage considered equally likely. How should Company B report this litigation?

A) As a liability for $50,000 with disclosure of the range.

B) As a liability for $75,000 with disclosure of the range.

C) As a liability for $100,000 with disclosure of the range.

D) As a disclosure only. No liability is reported.

The answer is not D.

PLEASE EXPLAIN, THANKS IN ADVANCE.

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