After December 31, 2020, but before the financial results are issued on March 15, 2021, the following independent events have occurred:

1. Sale of 4,000 shares of 7% preferred stock ($1 par value) on February 7, 2021. Total proceeds were $40,000.

2. Assume that the sale in (1) took place, but $20,000 of the proceeds was used to liquidate a note payable for $20,000 due on February 22, 2021.

3. Smoke and fire damage due to an electrical storm caused a fire in one area of the corporate facilities on January 15, 2021. Total damage is estimated to be $500,000. Due to an electrical storm on January 15, 2021, there was smoke and fire damage in one area of the corporate facilities. The damage is estimated to be $500,000.

4. On January 31, 2021, the company's president unexpectedly resigned.

5. On January 28, 2021, the company's board of directors was informed that a competitor will be filing a patent infringement lawsuit within the next week. In 2020, the product in question brought in $1 million in revenue from sales. Management is unable to reasonably estimate the loss at this time but believes it is reasonably possible that a loss would be incurred.

6. On January 15, 2021, employees voted to strike. The strike is scheduled to begin immediately. At the moment, the financial impact on the firm is unknown.

7. On January 5, 2021, a former employee filed a lawsuit against the corporation for wrongful termination. Employment was terminated effective September 2020. The case is highly probable to be settled, based on the conversations that occurred through mid-March, and the estimated range of damage is $60,000 to $100,000.

8. On January 25, 2021, a client was injured in the company's parking lot and threatened legal action. The possible financial impact is unknown at this time, and the likelihood of a loss is remote.

9. On February 15, 2021, the firm announced it will sell a discontinued operating segment.

10. The corporation was notified on March 1, 2021, that the state auditor will be investigating concerns with sales tax collection and payment. The corporation has determined that it is probable that a claim will be asserted, but the company plans to aggressively defend its position and feels that the likelihood of an unfavorable outcome is remote.

Required: Evaluate each of the preceding transactions and occurrences and provide accounting and reporting recommendations for the 2020 financial statements.