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BE$12\mathrm{.}12($LO $3)$ Scorcese Inc. is involved in a lawsuit at December $31,2025.($a$)$ Prepare the December $31$ entry assuming it is probable that Scorcese will be liable for $$900,000$ as a result of this suit. $($b$)$

Prepare the December $31$ entry, if any, assuming it is not probable that Scorcese will be liable for any payment as a result of this suit.

BE$12\mathrm{.}13($ Buchanan Company recently was sued by a competitor for patent infringement. Attorneys have determined that it is probable that Buchanan will lose the case and that a reasonable estimate

of damages to be paid by Buchanan is $$300,000.$ In light of this case, Buchanan is considering establishing a $$100,000$ self$-$insurance allowance. What entry$($ies$),$ if any, should Buchanan record to recognize

this loss contingency?

BE$12\mathrm{.}14($LO $3)$ Streep Factory provides a $2-$year warranty with one of its products which was first sold in $2025.$ Streep sold $$1,000,000$ of products subject to the warranty. Streep expects $$125,000$ of

warranty costs over the next $2$ years. In $2025,$ Streep spent $$70,000$ servicing warranty claims. Prepare Streep's journal entry to record the sales $($ignore Cost of Goods Sold$)$ and the December $31$ adjusting

entry, assuming the expenditures are inventory costs.

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