Q 1. One of Tonic Corp’s employees invented a revolutionary coffee lid that cools coffee as you drink it in order to prevent burns. Two children ordered coffee and burned their mouths after failing to properly secure the lids. The children’s parents sued. Tonic Corp’s. lawyers believe that it is highly probable that judgment will be rendered against Tonic Corp and it is likely a payment in excess of $2 million will be incurred. The proper accounting treatment of the lawsuit will 2. Accounts payable typically arise because 3. Accruing warranty expense will 4. Contingent liabilities whose ultimate payment is highly probable and can be reasonably estimated must be 5. Sweeney, Inc. borrowed $30,000 from the bank by signing a 9- month note payable. The proper accounting treatment of recording the note will