Current Attempt in Progress

Cheyenne Corporation, in preparation of its December $31,2025,$ financial statements, is attempting to determine the proper

accounting treatment for each of the following situations.

As a result of uninsured accidents during the year, personal injury suits for $$668,600$ and $$126,800$ have been filed against

the company. It is the judgment of Cheyenne's legal counsel that an unfavorable outcome is unlikely in the $$126,800$ case but

that an unfavorable verdict approximating $$550,000($reliably estimated$)$ will probably result in the $$668,600$ case.

Cheyenne owns a subsidiary in a foreign country that has a book value of $$6,161,000$ and an estimated fair value of

$$8,992,800.$ The foreign government has communicated to Cheyenne its intention to expropriate the assets and business of

all foreign investors. On the basis of settlements other firms have received from this same country, Cheyenne expects to

receive $40\%$ of the fair value of its properties as final settlement.

Cheyenne's chemical product division consisting of five plants is uninsurable because of the special risk of injury to employees

and losses due to fire and explosion. The year $2025$ is considered one of the safest $($luckiest$)$ in the division's history because

no loss due to injury or casualty was suffered. Having suffered an average of three casualties a year during the rest of the past

decade $($ranging from $$63,400$ to $$670,000),$ management is certain that next year the company will probably not be so

fortunate.

$($a$)$ Prepare the journal entries that should be recorded as of December $31,2025,$ to recognize each of the situations above. $($If no entry

is required, select $"$No Entry" for the account titles and enter $0$ for the amounts. Credit account titles are automatically indented when amount is

entered. Do not indent manually. List all debit entries before credit entries.$)$

No$.$

Date

Account Titles and Explanation

Debit

Credit

December

December

$31,2025$

December

$31,2025$