Provide enteries for the following preparing Fallon Company financial statements December 31, 2016

A customer is suing the company for $800,00 in damages bc her child was injured in November 2016 while riding an escalator that stopped suddenly in one of its stores. Legal counsel feels that the child id partially at fault, but it is probable that the lawsuit will be settled for between $50,000 and $100,000, with $80,000 being the most likely amount

Fallon has discovered that a skateboard it manufactured and sold in 2016 has a defective bearings. It estimates a cost od $200,000 for these repairs. No lawsuits have been filed for injury claims, although the company feels that there is a reasonable possibility that claims may total as high as $2 million

Fallon has an incinerator behind one of its retail outlets which is used to burn cardboard boxes received in shipments of inventory from suppliers. The state environmental protection agency filed suit against the company in August 2016 for air pollution. Fallon expects to stop using the incinerator and begin recycling. However, its lawyers believe that it is probable that a fine of between $40,000 and $60,000 will be levied against the company, altbough they cannot predict the exact amount.

In early 2016, Fallon signed a contract with a computer vendor to install state of the art cash registers in all of its retail outlets. Because of the vendors inabliltiy to acquire sufficient cash registers, the vendor canceled the contract. Fallon has filed a breach of contract suit against the vendor, claiming $300,000 in damages. The companys lawyers expect that it will settle the suit out of court for $150,000.

Required: For each situation, prepare the journal entry (if any) on December 31, 2016, to record the info for Fallon, and explain your reasoning. If no journal entry is recorded, explain how the information would be disclosed in Fallons 2016 annual report.

How would your answers change if Fallon used IFRS?