The following selected transactions relate to contingencies of Classical Tool Makers, Incorporated, which began operations in July 2024. Classical's fiscal year ends on December 31. Financial statements are issued in April 2025. 1. Classical's products carry a one-year warranty against manufacturer's defects. Based on previous experience, warranty costs are expected to approximate 3% of sales. Sales were $3.6 million (all credit) for 2024 . Actual warranty expenditures were $45,900 and were recorded as warranty expense when incurred. 2 Although no customer accounts have been shown to be uncollectible. Classical esdmates that 1\% of credit sales will eventually prove uncollectible. 3. In December 2024, the state of Tennessee filed suit against Classical, seeking penalties for violations of clean air laws. On January 23,2025 , Classical reached a settement with state authorities to pay $3.1 million in penaities. 4. Classical is the plaintiff in a $5.6 million lawsuit filed against a suppliet. The suit is in final appeal and attoineys advise that it is virtually certain that Classical will win the case and be awarded $4.1 million, an amount that is material to Classical. 5 . In November 2024. Classical became aware of a design flaw in an industrial saw that poses a potential electrical hazard. A product recall appears unavoidable. Such an action would likely cost the company $660,000. 6. Classical offered $20 cash rebates on a new model of jigsaw. Customers must mail in a proof-of.purchase seal from the package plus the cash register receipt to recelve the rebate Experience suggests that 65% of the rebates will be claimed Eleven thousand and six hundred of the jigsaws were sold in 2024 . Total rebates to customers in 2024 were $121,000 and were recorded as promotional expense when poid. Required: 1-o. Prepare the year-end entries fot any amounts that should be recorded as a tesult of each of the above contingencies. 1-b. Indicate whether a disclosure note is needed for the above transactions: Required: 1-a. Prepare the year-end entries for any amounts that should be recorded as a result of each of the above 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 contingen Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. E whole dollars. Journal entry worksheet 456 Record any necessary year-end entry related to the warranties. Note: Enter debits before credits. 4. Classical is the plaintiff in a $5.6 million lawsuit filed state authorities to pay $31 million in penalties. virtually certain that Classical will win the case and be against a supplier. The suit is in final appeal and attorneys advise thi 5. In November 2024, Classical became aware of a be awarded $4.1 million, an amount that is material to Classical. product recall appears unavoidable. Such an action was flaw in an industrial saw that poses a potential electrical hazard. 6. Classical offered $20 cash rebates on a new action would likely cost the company $660,000. thousand and six hundred of the jigsaws were sold in 2024 . recorded as promotional expense when paid. sold in 2024. Total rebates to customers in 2024 were $121,000 and were Required: 1-a. Prepare the year-end entries for any amounts that should be recorded as a result of each of the above contingencies. 1-b. Indicate whether a disclosure note is needed for the above transactions. Complete this question by entering your answers in the tabs below. Indicate whether a disclosure note is needed for the above transactions