The Lion King Company produces car and truck batteries that it sells primarily to ATV manufacturers.Simba, the company's controller, is preparing the financial statements for the year ended December 31, 2016.Simba asks for your advice concerning the following information that has not yet been included in the statements.

1.On January 8, 2017, Lion King entered into an agreement to sell a tract of land that it had been holding as an investment.The sale, which resulted in a material gain, was completed on February 2, 2017.

2.Lion King leases its facilities from Pumba the sister of the president.

3.On February 8, 2017, Lion King completed negotiations with its bank for a $10,000,000 line of credit.

4.Lion King uses the double declining balance method to determine amortization on all of the company's amortizable assets.

5.Lion King uses the weighted average method to value inventory.

6.At year end Lion King Company is involved with several situations that possibly involve contingencies.Each is described below. Assuming that Lion King's 2016 financial statements are issued on March 15, 2017.

A)Lion King Company is involved in a lawsuit resulting from a dispute with a supplier.On February 3, 2017, judgment was rendered against Lion King Company in the amount of $57 million plus interest, a total of $62 million.Lion King Company plans to appeal the judgment and is unable to predict its outcome, though it is not expected to have a material adverse effect on the company.

B) In November 2016, the Province of Kilimanjaro filed suit against Lion King Company, seeking civil penalties and injunctive relief for violations of environmental laws regulating hazardous waste.On January 12, 2017, Lion King Company reached a settlement with provincial authorities.On the basis of discussions, with legal counsel, the Company feels it is likely that $140 million will be required to cover the cost of violations.Lion King Company believes that the ultimate settlement of this claim will not have a material adverse effect on the company.

Required:

For each of the above items, discuss any additional disclosures that Simba should include in Lion King's financial statements.