Problem 13-6 (Algo) Various contingencies; disclosures [LO13-5, 13-6] Eastem Manufacturing is involved with several situations that possibly involve contingencles. Each is described below. Eastern's fiscal year ends December 31, and the 2024 financia statements are issued on March 15, 2025. a. Eastern is - involved in a lawsult resulting from-a dispute with-a suppiler. On February 3, 2025, judgment was rendered against Eastern-In the amount of $126 mililon plus interest, a total of $141 million. Eastern plans to appeal the judgment and is unable to predict its outeome though it is not expected to have amaterlaliadverse effect on the company. b. In November 2023 , the State of Nevada filed sult against Eastern, seeking clvil penalties and injunctive rellef for violations of environmental laws.regulating hazardous waste: On January 12, 2025. Eastern reached a settlement with state authoritles. Based upon discussions with legal counsel, the company feels it is probable that $159 million will be required to cover the cost of volations. Eastern belleves that the ultimate settlement of this claim will not have a materlal adverse effect on the company. c. Eastern is the plaintiff in a \$219 million lawsult filed against United Steel for damages due to lost profits from rejected contracts and for unpaid recelvables. The case:is in inal appeal and legal counsel advises that it is probable that Eastern will prevall and be awarded $130 miltion. d AtMarch 15, 2025, Eastein knows a competior has threatened litigation due to patent infilingement The competitor has not yet filed a lawsult Management belleves a lawsult is reasonably possible, and if alawsult is filed, management belleves damages of up to $52 million are reasonably possible. Required: 1. Determine the approprlate way to report each-situation. 2. Prepare the appropratejoumal entres for these situations: Complete this question by entering your answers in the tabs below. Determine the appropriate way to report each situation. e the appropriate journal entries for these situations, If no entry is required for a transactionlevent, select "No journal entry required" in the first account fiela. dollars. Eastern is involved in a lawsuit resulting from a dispute with a supplier. On February 3,2025 , judgment was rendered against Eastern in the amount of $126 million plus interest, a total of $141 million. Eastern plans to appeal the judgment and is unable to predict its outcome though it is not expected to Note: Enter dehits before credits, Journal entry worksheet In November 2023, the State of Nevada filed suit against Eastern, seeking civil penalties and injunctive relief for violations of environmental laws regulating hazardous waste. On January 12, 2025, Eastern reached a settlement with state authorities. Based upon discussions with legal counsel, the Company Journal entry worksheet Eastern is the plaintiff in a $219 million lawsuit filed against United Steel 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 probable that Eastern will prevail and be awarded $130 million. Note: Enter debits before credits. Journal entry worksheet At March 15, 2025, Eastern knows a competitor has threatened litigation due to patent infringement. The competitor has not yet filed a lawsuit. Management believes a lawsuit is reasonably possible, and if a lawsuit is filed, management believes damages of up to $52 million are reasonably possible. Note: Enter debits before credits