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The following selected transactions relate to contingencies of Classical Tool Makers, Incorporated, which began operations in Jofy 2024. Classical's fiscal year ends on December 31.

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The following selected transactions relate to contingencies of Classical Tool Makers, Incorporated, which began operations in Jofy 2024. Classical's fiscal year ends on December 31. Financial statements are issued in Apri 2025 1. Classical's products carry a one-year warranty against manufacturer's defects. Based on previous experience, warranty costs are expected to approximate 5% of sales. Sales were $24 million (all credit) for 2024 . Actual wantanty expenditures were 547 ioo and were recorded as warranty expense when incutred 2. Although no customer accounts have been shown to be uncollectible. Classical estimates that 2% of credit sales witi eventum fy prove uncollectible. 3. In December 2024, the state of Tennessee filed sult against Classicak, seeking penalties for violations of clean air iaws. Ont January 23, 2025, Classical reached a settlement with state authorities to pay $19 milion in penaities. 4. Classical is the plaintiff in a $4.4 million lawsuit filed against a supplier. The suit is in final appeal and attomeys acvise that is virtually certain that Classical will win the case and be awarded $2.9 millon, an amount thar is material to Classicat 5. In November 2024. Classical became aware of a design flaw in an industrial saw that poses a potentlal electhcal hazard A product recall appears unavoldable. Such an action would likely cost the company $540,000 6. Classical offered $20 cash rebates on a new model of jigsaw. Customers must mail in a proof of purchase seal from the packaige: plus the cash register receipt to receive the rebate. Expenence suggests that 70% of the rebates wifi be claimed. Ten thatisand and four hundred of the Jigsaws were sold in 2024. Total rebates to customers in 2024 were $109.000 and were recoided as promotional expense when paid. Required: 1-a. Prepare the year-end enthes for any amounts that should be recorded as a result of each of the above conningencies. 1-b. Indicate whether a disclosure note is needed for the above transactions Complete this question by entering your answers in the tabs below. Prepare the year-end entries for any amounts that should be recorded as a result of each of the above contingancies. Note: If no entry is required for a tronsaction/event, select "No foumat entry required" in the firmt account felid. Enter your antain ini whole dollars. Journal entry worksheet Record any necessary year-end entry ralated to the warranties. fote: Enterdebits biofrre eredita. Journal entry worksheet Record any necessary year-end entry related to uncollectible accounts. Note: Enter debits before credits: Journal entry worksheet 6 Record any necessary year-end entry related to clean air law violations. Note: Enter debits before credits. Record any necessary year-end entry related to the lawsuit filed against a supplier. 2otet Enter debits before credits. Record any nocessary year-end entry related to a product recall. Note: Enter debits before credits. Journal entry worksheet 1234 Record any necessary year-end entry related to rebates. Note: Enter debits before credits. The following selected transactions relate to contingencies of Classical Tool Makers, Incorporated, which began operations in Jofy 2024. Classical's fiscal year ends on December 31. Financial statements are issued in Apri 2025 1. Classical's products carry a one-year warranty against manufacturer's defects. Based on previous experience, warranty costs are expected to approximate 5% of sales. Sales were $24 million (all credit) for 2024 . Actual wantanty expenditures were 547 ioo and were recorded as warranty expense when incutred 2. Although no customer accounts have been shown to be uncollectible. Classical estimates that 2% of credit sales witi eventum fy prove uncollectible. 3. In December 2024, the state of Tennessee filed sult against Classicak, seeking penalties for violations of clean air iaws. Ont January 23, 2025, Classical reached a settlement with state authorities to pay $19 milion in penaities. 4. Classical is the plaintiff in a $4.4 million lawsuit filed against a supplier. The suit is in final appeal and attomeys acvise that is virtually certain that Classical will win the case and be awarded $2.9 millon, an amount thar is material to Classicat 5. In November 2024. Classical became aware of a design flaw in an industrial saw that poses a potentlal electhcal hazard A product recall appears unavoldable. Such an action would likely cost the company $540,000 6. Classical offered $20 cash rebates on a new model of jigsaw. Customers must mail in a proof of purchase seal from the packaige: plus the cash register receipt to receive the rebate. Expenence suggests that 70% of the rebates wifi be claimed. Ten thatisand and four hundred of the Jigsaws were sold in 2024. Total rebates to customers in 2024 were $109.000 and were recoided as promotional expense when paid. Required: 1-a. Prepare the year-end enthes for any amounts that should be recorded as a result of each of the above conningencies. 1-b. Indicate whether a disclosure note is needed for the above transactions Complete this question by entering your answers in the tabs below. Prepare the year-end entries for any amounts that should be recorded as a result of each of the above contingancies. Note: If no entry is required for a tronsaction/event, select "No foumat entry required" in the firmt account felid. Enter your antain ini whole dollars. Journal entry worksheet Record any necessary year-end entry ralated to the warranties. fote: Enterdebits biofrre eredita. Journal entry worksheet Record any necessary year-end entry related to uncollectible accounts. Note: Enter debits before credits: Journal entry worksheet 6 Record any necessary year-end entry related to clean air law violations. Note: Enter debits before credits. Record any necessary year-end entry related to the lawsuit filed against a supplier. 2otet Enter debits before credits. Record any nocessary year-end entry related to a product recall. Note: Enter debits before credits. Journal entry worksheet 1234 Record any necessary year-end entry related to rebates. Note: Enter debits before credits

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