Problem
In January 2015, a customer filed a lawsuit against Fireen's Boutique. The customer fell on an icy patch in the store's parking lot and broke an ankle in December. Fireens's fiscal year end is january 31st. The company's attorney believe that it is reasonably possible that Fireen's will lose this case with a 60% probability. The attorney estimates the loss to be between 400000 to 500000, which is material to Fireen's
a. Explain how the lawsuit would be reported
b. Prepare any required journal entries.