Journal entry worksheet

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

Note: Enter debits before credits. Journal entry worksheet

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

Note: Enter debits before credits. Journal entry worksheet

Record any necessary year$-$end entry related to clean air law violations.

Note: Enter debits before credits.Journal entry worksheet

Note: Enter debits before credits.

$\backslash$table$[[$Transaction$,$General Journal,Debit,Credit$],[4,,,],[,,,],[,,,],[,,,],[,,,],[,,,]]$ The following selected transactions relate to contingencies of Classical Tool Makers, Incorporated, which began operations in July

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 on previous experience, warranty costs are

expected to approximate $2\%$ of sales. Sales were $$3\mathrm{.}3$ million $($all credit$)$ for $2024.$ Actual warranty expenditures were $$22,800$

and were recorded as warranty expense when incurred.

Although no customer accounts have been shown to be uncollectible, Classical estimates that $2\%$ of credit sales will eventually

prove uncollectible.

In December $2024,$ the state of Tennessee filed suit against Classical, seeking penalties for violations of clean air laws. On

January $23,2025,$ Classical reached a settlement with state authorities to pay $$2\mathrm{.}8$ million in penalties.

Classical is the plaintiff in a $$5\mathrm{.}3$ million lawsuit filed against a supplier. The suit is in final appeal and attorneys advise that it is

virtually certain that Classical will win the case and be awarded $$3\mathrm{.}8$ 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 hazard. A

product recall appears unavoidable. Such an action would likely cost the company $$630,000.$

Classical offered $$20$ cash rebates on a new model of jigsaw. Customers must mail in a proof$-$of$-$purchase seal from the package

plus the cash register receipt to receive the rebate. Experience suggests that $65\%$ of the rebates will be claimed. Eleven

thousand and three hundred of the jigsaws were sold in $2024.$ Total rebates to customers in $2024$ were $$118,000$ and were

recorded as promotional expense when paid.

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.

$2.$ Record any necessary year$-$end entry related to uncollectible accounts.

$3.$ Record any necessary year$-$end entry related to clean air law violations

$4.$ Record any necessary year$-$end entry related to the lawsuit filed against a supplier.

$5.$ Record any necessary year$-$end entry related to a product recall.

$6.$ Record any necessary year$-$end entry related to rebates