How would the following be disclosed on W&H Company's financial statements? The balance sheet was dated December 31, 2010, and the financial statements were issued February 14, 2011.
1. The Internal Revenue Service has claimed that W&H Company owes $450,000 of additional taxes for the first quarter of 2010; the claim was made in a suit filed on January 25, 2011. W&H Company's tax adviser estimates that the actual amount that will be paid is between $270,000 and $318,000.
2. On January 15. 2011, a fire destroyed one of W&H Company's warehouses. The warehouse had a net book value of $2,735,000 on the year-end balance sheet.
3. During 2010, a lawsuit was filed against W&H Company that claimed $750,000 in punitive damages and $400,000 for personal injury, which the plaintiff alleges occurred when using one of W&H Company's products. The suit was not settled as of December 31, 2011, but the company's attorney is convinced insurance would pay 75 percent of any award.
4. In late December, 2010 several dissident shareholders had informed the company that they intended to sue the W&H board of directors for $5,000,000 because the board had rejected a merger offer proposed by a major supplier. The company has indemnified the directors; thus, any judgment against the directors would be paid by the company. W&H Company's attorney felt any such suit would be without merit.