Your client, Williams Manufacturing, is involved with several situations that possibly involve contingencies. There are four situations that are described below. Williamss fiscal year is the calendar year 2024, and the 2024 financial statements are issued on March 15, 2025.

1. During 2024, tensions between workers and Williams management developed at a few plants. Labor disputes ensued, and management has been in talks with the union. Williams and the labor union have not yet reached a settlement, and as such, strikes have been occurring at these facilities since March 1, 2025. It is virtually certain that material costs will be incurred but the amount of possible costs cannot be reasonably determined.
2. A 2022 contractual agreement with Barrow Inc. entitles Williams to $45 million for certain fees and expense reimbursements. These were written off as bad debts in 2023. Barrow Inc has filed for bankruptcy. The bankruptcy court on February 19, 2025, ordered Barrow Conner to pay $36 million immediately upon consummation of a proposed merger with Goodner Group.
3. Williams provides warranties against defects on most products it sells for one year after sale. Past experience indicates that warranty costs are expected to approximate 2% of sales. A warranty liability of $45 million was reported at December 31, 2023. Sales of warranted products during 2024 were $3,100 million and actual warranty expenditures were $50 million.
4. Williams is involved in a suit filed in January 2025 by Canary Corp. seeking $78 million, as an adjustment to the purchase price in connection with the Companys sale of its textile business in 2024. The suit alleges that Williams misstated the assets and liabilities used to calculate the purchase price for the textile division. Legal counsel advises that it is reasonably possible that Williams could end up losing an indeterminable amount not expected to have a material adverse effect on the Companys financial position.

Required:

1. Locate the appropriate section(s) in the FASB Accounting Standards Codification that provides guidance on reporting for Contingencies and Loss Contingencies.

2. For each situation above (a-d), determine the appropriate means of reporting each situation. Please cite the Codification to support your contentions. When incorporating the FASB guidance into your answers, please do the following please provide both some summary (paraphrasing) of the codification as well as a few direct quotes (they can be short) that are supported by specific citations.