Classify the following transactions and economic events for Moonbeam Ltd. (Moonbeam) as commitments, subsequent events, or contingencies. Some may fit more than one classification.

Indicate how each should be reflected in the December 31, 2014 financial statements and explain your reasoning. In responding, consider the usefulness of the information to different stakeholders.

a. In January 2015, a company that Moonbeam was suing for damages for breaching a contract made an offer of $500,000 to settle the case. Moonbeam agreed to accept the offer. Payment was received on January 21, 2015.

b. In May 2014, Moonbeam launched a $10 million lawsuit against a company for breach of contract. The suit is expected to reach the courts by mid-2015.

Moonbeam’s lawyers believe the company has a good chance of winning the suit.

c. On November 15, 2014, Moonbeam decided to construct a new head office building for $3.5 million. The board of directors allocated funds for the project and contracts are being finalized with construction contractors. The project is scheduled to begin in September 2015.

d. On January 18, 2015, one of Moonbeam’s warehouses burned to the ground.