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On December 31, Year 4, Mith Co. was a defendant in a pending lawsuit. The...

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Accounting

On December 31, Year 4, Mith Co. was a defendant in a pending lawsuit. The suit arose from the alleged defect of a product that Mith sold in Year 1. In the opinion of Miths attorney, it is probable that Mith will have to pay $50,000, and it is reasonably possible that Mith will have to pay $60,000 as a result of this lawsuit. In its Year 4 financial statements, Mith should report
A. An accrued liability of $50,000 only.
B. No information about this lawsuit.
C. An accrued liability of $50,000 and would disclose a contingent liability for an additional $10,000.
D. An accrued liability of $60,000 only.

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