Problem 8-7B (Static) Record contingencies (LO8-5) Compact Electronics is a leading manufacturer of digital camera equipment. Assume the following transactions occur during the year ended December 31, 2024. 1. Accounts recelvable were $29 million (all credit) at the end of 2024. Although no specific customer accounts have been shown to be uncollectible, the company estimates that 3% of accounts recelvable will eventually prove uncollectible. 2. Compact Electronics is the plaintiff in a $5 million lawsuit filed against a supplier. The suit is in final appeal, and attorneys advise it is virtually certain that Compact Electronics will win and be awarded $3.5 million. 3. In November 2024, Compact Electronics became aware of a design flaw in one of its digital camera models. A product recal appears probable and would likely cost the company $600,000. 4. Compact Electronics is the defendant in a patent infringement lawsuit brought by a competitor. It appears reasonably likely Compact Electronics will lose the case, and potential losses are estimated to be in the range of $2.5 to $3.5million. Required: Determine the appropriate way Compact Electronics would report the contingencies. Record any amounts as a result of each of these contingencies if required. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field. Enter your answers in dollars, not in millions. For example, $5.5 million should be entered as 5,500,000.) Journal entry worksheet Accounts receivable were $29 million (all credit) at the end of 2024. Although no specific customer accounts have been shown to be uncollectible, the company estimates that 3% of accounts receivable will eventually prove uncollectible. Record the adjusting entry. Note: Enter debits before credits. Journal entry worksheet Compact Electronics is the plaintiff in a $5 million lawsuit filed against a supplier. The suit is in final appeal, and attorneys advise it is virtually certain that Compact Electronics will win and be awarded $3.5 million. Record any required entry for this contingency. Note: Enter debits before credits. Journal entry worksheet In November 2024, Compact Electronics became aware of a design flaw in one of its digital camera models. A product recall appears probable and would likely cost the company $600,000. Record any required entry for this contingency. Note: Enter debits before credits. field. Enter your answers in dollars, not in millions. For example, $5.5 million should be entered as 5,50 Journal entry worksheet 1 Compact Electronics is the defendant in a patent infringement lawsuit brought by a competitor. It appears reasonably likely Compact Electronics will lose the case, and potential losses are estimated to be in the range of $2.5 to $3.5 million. Record any required entry for this contingency. Note: Enter debits before credits
