Daniel is a self-made millionaire, but he has been medically committed to a mental health facility. a court also ordered daniel's sister, michelle, to preside over daniel's business affairs. once inside the mental health facility, daniel befriends his nurse, amanda. one day, amanda tells daniel about her invention to identify stray dogs and cats. daniel was so impressed by amanda's invention that he offers to buy it for $500,000. amanda accepts daniel's offer. did daniel and amanda form a contract?

The following legal claims exist for m. finger co. identify the accounting treatment for each claim as either (a) a liability that is recorded or (b) an item described in notes to its financial statements. 1. m. finger (defendant) estimates that a pending lawsuit could result in damages of $1,250,000; it is reasonably possible that the plaintiff will win the case. an item described in notes to its financial statements. a liability that is recorded. 2. m. finger faces a probable loss on a pending lawsuit; the amount is not reasonably estimable. a liability that is recorded. an item described in notes to its financial statements. 3. m. finger estimates damages in a case at $3,500,000 with a high probability of losing the case. an item described in notes to its financial statements. a liability that is recorded. the amount that m. finger co. should record in its accounting records related to these suits is: