Sonic Ltd:

1. Sonic Ltd has been notified that a former employee has commenced legal action for unfair dismissal, claiming $50,000. Initial legal advice suggests that the former employee has no chance of success.
2. A driver for Sonic Ltd crashed into a customer's building and caused $60,000 of damage. Sonic Ltd has admitted liability, and the customer has presented the company with a bill for the damage.
3. Sonic Ltd has provided a customer with faulty goods, which, when used in the customer's production process, caused the machinery to break down. The customer is taking Sonic Ltd to court for lost earnings while the machinery was shut down. Sonic Ltd's lawyers believe the customer to have a strong case, although the amount of damages payable cannot be estimated reliably.
4. Sonic Ltd manufactures goods that are sold with a one-year warranty against defects. Should a provision be recognised for the cost of repairing faulty goods?