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For each question and sub-question, you must cite the specific section of the FASC that applies to receive credit (e.g. FASC 210-20-15-1). Use the following example for the format: Based on FASC 360-10-X, which states ***, the firm should record ***.

Case #1 Accounting for a Loss Contingency for a Verdict Overturned on Appeal M International (M) and W Inc. ("W, a competitor of M) have been engaged in long- standing litigation over a specific patent infringement matter. Below is a summary timeline of specific events that have taken place related to this matter: 1. In May 2017, W filed a claim against M for patent infringement. 2. For the year ended December 31, 2017, management of M determined that a loss for this matter was probable and represented that the estimate of loss was in the range of $15 million to $20 million, with $17 million being the most likely amount of loss within the range. 3. A jury trial took place in September 2019. 4. The jury reached a verdict on September 24, 2019, and a judgment was ordered in favor of W. The judgment required M to pay W $18.5 million. 5. In November 2019, M filed a Notice of Appeal with the Court of Appeals. 6. In December 2020, the Court of Appeals issued a ruling in favor of M's appeal and reversed the lower court's ruling on the matter. This meant that the Court of Appeals overturned the jury verdict and the $18.5 million judgment against M. 7. On December 20, 2020, management of M determined this matter was closed upon discussions with in-house legal counsel. Required 1. (2 points) For the year-end December 31, 2017, financial statements, what amount should M record as a liability? 2._(2 points) For the year-end December 31, 2019, financial statements, should M adjust its liability? If so, what amount should be recorded; and should the amount of the adjustment be considered a 2019 event or a prior period adjustment? 3. (1point) For the year-end December 31, 2020, financial statements, what amount should M record as a liability

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