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Question - Juicy Froots Company is being sued by a former employee. The lawsuit claims that Candi Barrs suffered emotional pain and trauma as a result of having to have all of her teeth removed. As an employee of Juicy Froots, she was encouraged to eat the company's namesake product, Juicy Froots snacks. The lawsuit claims that the sticky, high sugar product caused all of Candi's teeth to rot after 20 years of daily consumption. The attorney for Juicy Froots Company believes that it is probable that Candi will prevail in seeking payment for pain and suffering. The attorney also feels that the range of potential liability is between $500,000 and $1,000,000.
a. Should the accountant for Juicy Froots record this event?
b. If so, how much should be recorded and why?
c. Which category should the potential liability be classified as, if any?
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