Continuing Problem: Front Row Entertainment Front Row has the following selected balances at February 28, 2018:

The following information is not reflected in these balances:

a. On February 28, 2018, Front Row Entertainment accepted delivery of \(\$ 5,325\) of liveperformance DVDs from its supplier. Front Row has not yet paid the supplier.

b. On February 1, Front Row Entertainment purchased \(\$ 8,000\) of equipment for its Toronto Music House venue by issuing a one-year note payable bearing \(10 \%\) interest. Front Row has not made any journal entries related to this transaction and should accrue for this at month's end. (Note: Round any calculations to the nearest dollar.)

c. Front Row Entertainment collected \(\$ 3,745\) of advance ticket sales related to an upcoming concert. This price included \(7 \%\) provincial sales tax.
In addition, several individuals were injured during a concert in February when they pushed past security and rushed the stage. A personal injury lawsuit has been filed against Front Row Entertainment in the amount of \(\$ 250,000\). After investigating the incident and consulting with legal counsel, it has been determined that the likelihood of a judgment against Front Row is remote.
\section*{Required:}
1. Prepare the necessary journal entries for \(a\) through \(c\). (Note: Round all calculations to the nearest dollar.)
2. Determine the current ratio before and after the additional information.
3. How should this lawsuit be recorded? Disclosed?
\section*{Case

Transcribed Image Text:

Account Debit Credit Cash $12,480 Accounts receivable. 3,900 Inventory 20.380 Other current assets 31.000