Question

Reeves Co. filed suit against Higgins, Inc., seeking damages for copyright violations. Higgins' legal counsel believes it is probable that Higgins will settle the lawsuit for an estimated amount in the range of $170,000 to $270,000, with all amounts in the range considered equally likely. How should Higgins report this litigation?
As a liability for $170,000 with disclosure of the range.

As a disclosure only. No liability is reported.

As a liability for $270,000 with disclosure of the range.

As a liability for $220,000 with disclosure of the range.

Answer 1

Answer

The answer and procedures of the exercise are attached in the following archives.

Explanation  

You will find the procedures, formulas or necessary explanations in the archive attached below. If you have any question ask and I will aclare your doubts kindly.