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?

structions Fallion Company, a toy manufacturer that also operates several retail outlets, is preparing its December 31, 2016, financial statements 1 A customer is suing the company for $800,000 in damages because her child was injured in November 2016 while riding an escalator that stopped suddenty in one of its stores The child was hurt when he tripped and fell while walking down an escalator that was going "up Legal counsel feels that the child is partially at fault, but that it is probable that the lawsut wilt be settled for between $50.000 and $100,000, with $80.000 being the most lkely amount Fallon has discovered that a skateboard t began manutacturing and selling in 2016 has defective 2 bearings, sometimes causing a wheel to fall off Falion has ssued a recalr notice in newspapers and magazines in which it offers to replace the bearings It estimates a cost of $200.000 for these repairs No lawsuits have been tiled for injury claims, although the company feels that there is a reasonable possibility that claims may total as high as $2 million 3 Fallon has an incinerator behind one of its retail outlets which is used to burn cardtboard boxes receved 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, athough they cannot predict the exact amount in early 2016 Falon signed a contract with a computer vendor to install "state of the art cash registers 4 in all of its retail outlets Because of the vendor's inabaty to acquire sutficient cash registers, the vendor canceled the contract Fallon has fled a breach of contract suit against the vendor, claming $300,000 in damages The company's lawyers expect that it will settie the suit "out of court for $150,000 Required Next Level For each situation, prepare the joumal entry of any) on December 31, 2016 to record the information for Falon and explain your 1 reasoning if no jounal entry is recorded explain howthe information would be dociosed in Faon's 2016 annual report 2 How would your answers change Falon used IFRS