Finley Roofing is inwolved with several situations that possibly inwolve contingencles. Each is described below. Finley's fiscal year ends December $31,$ and the $2024$ financial statements are issued on March $20,2025.$

Finley is inwolwed in a lawsuit resulting from a dispute with a customer. On January $25.2024,$ judgment was rendered against Finley in the amount of $$30$ milion plus interest, a total of $$33$ million. Finley plans to appeal the jud gment, and belleves it highly probable that the judgement will be reduced to between $$18$ milition to $$20$ million.

At March $20.2024,$ the EPA is in the process of investigating possible environmental violations at one of Finiey's work sites, but has not proposed a deficiency assessment. Management fecls an assessment is probable, and if an assessment is made an unfavorable settiement of $$11$ million is reasonably possible.

Finley is the plaintiff in a $$75m$ ilion lawsult fled against AA Asphalt for damages due to lost profits from rejected contracts and for unpaid receivables. The case is in final appeal and legal counsel advises that it is certain that Finley will prevail and be awarded $$68$ million. The settlement is material to Finley's financial statements.

In October $2023,$ the State of Montana filed suit apainst Finley, seeking civil penalties and injunctive relief for violations of environmental laws regulating hazardous waste. At the time. the company's lawyers stated that it was probable that the company would have to pay $$32$ million in fines. On February $3,2024.$ Finley reached a settlement with state authorities, Based upon discussions with legal counsel, the Company feels it is probable that $$45$ million will be required to cover the cost of violations.

Instructions:

Determine the appropriate means of reporting each situation and explain why

Prepare any necessary journal entry.