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Exercise 13-20 (Algo) Various transactions involving contingencles (LO13-5, 13-6) The following selected transactions relate to contingencles of Classical Tool Makers, Inc., which began operations In July 2021. Classical's fiscal year ends on December 31. Financial statements are issued in April 2022 1. Classical's products carry a one-year warranty against manufacturer's defects. Based on previous experience, warranty costs are expected to approximate 3% of sales. Sales were $2.3 million (all credit) for 2021. Actual warranty expenditures were $20.100 and were recorded as warranty expense when incurred. 2. Although no customer accounts have been shown to be uncollectible, Classical estimates that 2% of credit sales will eventually prove uncollectible. 3. In December 2021, the state of Tennessee filed suit against Classical, seeking penalties for violations of clean air laws. On January 23. 2022, Classical reached a settlement with state authorities to pay $1.8 million in penalties. 4. Classical is the plaintiff in a $4.3 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 $2.8 million. 5. In November 2021, 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 $530,000. 6. Classical offered $25 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 60% of the rebates will be claimed. Ten thousand and three hundred of the Jigsaws were sold in 2021. Total rebates to customers in 2021 were $108,000 and were recorded as promotional expense when pald. Required: 1-a Prepare the year-end entries for any amounts that should be recorded as a result of each of the above contingencles. 1-b Indicate whether a disclosure note is needed for the above transactions. Complete this question by entering your answers in the tabs below. Reg 1A Reg 1B Prepare the year-end entries for any amounts that should be recorded as a result of each of the above contingencies. (If no entry is required for a transaction/event, select "No journal entry required in the first account field. Enter your answers in whole dollars.) View transaction lat Journal entry worksheet 1 2 3 4 5 6 Record any necessary year-end entry related to the warranties. Note: Enter debits before credits Transaction General Journal Debit Credit Record entry Clear entry View general Journal Reg 1A Reg 1B > Journal entry worksheet Record any necessary year-end entry related to uncollectible accounts. Note: Enter debits before credits Transaction General Journal Debit Credit Record entry Clear entry View general Journal Reg 1A Req 1B > Journal entry worksheet Journal entry worksheet Record any necessary year-end entry related to the lawsuit filed against a supplier Note: Enter debits before credits Transaction General Journal Debit Credit Record entry Clear entry View general Journal Reg 1A Reg 1B > Journal entry worksheet Record any necessary year-end entry related to a product recall. Note: Enter debits before credits Transaction General Journal Debit Credit Record entry Clear entry View general Journal Red 1A Reg 1B Journal entry worksheet Record any necessary year-end entry related to rebates. Note: Enter debits before credits Transaction General Journal Debit Credit Record entry Clear entry View general Journal Reg 1A Reg 1B > Req 1A Reg 1B Indicate whether a disclosure note is needed for the above transactions. Event 1 Event 2 Event 3 Event 4 Event 5 Event 6