Edge Co.a toy manufacturer, is in the process of preparing its financial statements for the year ended December 31Year 8. Edge expects to issue its Year financial statements on March 1. Year 9. Items 1 through 6 represent potential contingencies that have not been reflected in the financial statements. For each item, the following two responses are required.

a Input the appropriate adjustment amount, if anyIf no adjustment is necessary please indicate this by responding no adjustment necessary.

b . Indicate whether additional disclosure is required, either on the face of the financial statements or in the notes to the financial statements. Choose yes or no for your response.

Each choice may be used once, more than once, or not at all .

statement:

1. Edge owns a small warehouse located on the banks of a river in which it stores inventory worth approximately $ 500,000 Edge is not insured against flood losses . The river last overflowed its banks 20 years ago.

Amount of adjustment??

Additional disclosure required??

2. In May of Year 8 an explosion occurred at Edge's toy plant , causing damage to area properties . By the end of the year , no claims had been asserted against Edge . However , Edge believes it is probable that a lawsuit will be filed next year regarding its responsibility for the damage . Edge's legal counsel concluded that if the lawsuit is filed next year $100,000 to $ 500,000 will be a reasonable estimate of the range of damages , and $ 150,000 is a better estimate than any other amount in this range.

Amount of adjustment??

Additional disclosure required??

3. Edge offers an unconditional warranty against manufacturing defects on its toys. Based on past experience Edge estimates it warranty expense to be 1% of sales Sales during Year 8 were $10 million.

Amount of adjustment??

Additional disclosure required??

4. On October 30Year 8a safety hazard related to one of Edge's toy products was discovered. It is probable that Edge will be liable for an amount in the range of $ 100,000 to $500,000

Amount of adjustment??

Additional disclosure required??

5. On November 22Year 8, Edge initiated a lawsuit seeking $250,000 in damages from patent infringement

Amount of adjustment??

Additional disclosure required??

6. On December 17Year 8, a former employee filed a lawsuit seeking $100,000 for unlawful dismissal . Edge's attorneys believe the suit is without merit . No court date has been set .

Amount of adjustment??

Additional disclosure required??