$3$

The follawing selected transactions relate to contingencies of Classical Tool Makers, Incorporated, which began operations in July $2024.$ Classical's fiscal year ends on December $31.$ Financial statements are issued in April $2025.$

Classical's products carry a one$-$year warranty against manufacturer's defects. Based an previous experience, warranty costs are Classicals products carry a one$-$year warranty against manufacturer's defects. Eased an previous experience, warranty costs ar expected to approximate $3$$ of sales. Sales were $$3\mathrm{.}4$ million $($all credit$)$ for $2024.$ Actual warranty expendfures were $$42\mathrm{.}200.$ expected to approximate $34$ of sales. Sales were $$3\mathrm{.}4m$

Although no custemer accounts have been shown to be uncolectible Clossical estimates that $2\%$ of credit sales wall eventually

Although no custormer

In December $2024,$ the state of Tennessee filed sult against Classical, seeking penalties for viblations of clean air laws On

January $23,2025,$ Classical reached a settiement with state authorities to pay $$2\mathrm{.}9$ milion in penaltics.

Classical is the plaintiff in a $$5\mathrm{.}4$ millian lawsut filed against a supplier. The suit is in final appeal and attomeys advise that it is

virtually certain that Classical will win the case and be awarded $$3\mathrm{.}9$ million, an amount that is material to Classical.

In November $2024,$ Classical became aware of a design flaw in an industrial saw that poses a potential electrical hamard. A

in November $2024,$ Classical became aware of a design flaw in an industrial saw that poses a

Classical offered $$25$ cash rebates on a new model of jigsaw. Customers must mall in a proof of purchase seal from the package

plus the cash register receipt to recelve the rebate. Experience sugpests that $60\%$ of the rebates will be claimed. Eleven

thousand and four hundred of the jigsaws were sold in $2024.$ Total rebates to customers in $2024$ were $$119\mathrm{.}000$ and were

recorded as prometional expense when paid.

Required:

$1.$a$.$ Prepare the year$-$end entries for any amounts that should be recarded as a result of each of the above contingencies. $1.$b$.$ Indicate whether a disclosure note is needed far the above transactians.

Complete this question by entering your answers in the tabs below.

Sea $1$ is

Rea, $18$

Prepare the year$-$end entries for any ameunts that should be recorded as a resulk of each of the above centingencies. Note: If no entry is required for a transaction$/$event$,$ select $"$No joumal entry required" in the first accounc. feld. Enter your answers in whole dollars.

Journal entry worksheet

Record any necessary year$-$end entry related to the warranties.

$1$

$2$

$3$

$4$

$5$

$6$

Record any necessary year$-$end entry related to uncollectible accounts.

Journal entry worksheet

$1$

$2$

$3$

$4$

$5$

$6$

Rernrd anv nerescarv vear$-$pnd entrv related to rlean air law violations.

Journal entry worksheet

Record any necessary year$-$end entry related to the lawsuit filed against a supplier.

Journal entry worksheet

$1$

$2$

$3$

$4$

$5$

$6$

Record any necessary year$-$end entry related to a product recall.

Journal entry worksheet

$1$

$2$

$3$

$4$

$5$

$6$

Record any necessary year$-$end entry related to rebates.

Note: Enter debits before credits.

Required:

$1-$a$.$ Prepare the year$-$end entries for any amounts that should be recorded as a result of each of the above contingencies.

$1-$b$.$ Indicate whether a disclosure note is needed for the above transactions.

Complete this question by entering your answers in the tabs below.

Req $1A$

Indicate whether a disclosure note is needed for the above transactions.

$\backslash$table$[[$Event $1,],[$Event $2,],[$Event $3,],[$Event $4,],[$Event $5,],[$Event $6,]]$