8-8A Record contingencies (LO8-5) Dinoco Petroleum faces three potential contingency situations, described below. Dinoco's fiscal year ends December 31, 2021, and it issues its 2021 financial statements on March 15, 2022. In the initial trial, Dinoco lost a $117 million lawsuit resulting from a dispute with a supplier. The case is under appeal. Although Dinoco is unable to predict the outcome, it does not expect the case to have a material adverse effect on the company. Assume that the loss is probable. In November 2020, the state of Texas filed suit against Dinoco, seeking civil penalties and injunctive relief for violations of environmental laws regulating hazardous waste. On January 12, 2022, Dinoco reached a settlement with state authorities. Based upon discussions with legal counsel, it is probable that Dinoco will require $137 million to cover the cost of violations. Dinoco is the plaintiff in a $170 million lawsuit filed against a customer for damages due to lost profits from rejected contracts and for unpaid receivables. The case is in final appeal, and legal counsel advises that it is probable Dinoco will prevail and be awarded $85 million.

Problem 8-8A Record contingencies (LO8-5) Dinoco Pet oleum faces three potential contingency situations, described below. Dinoco's fiscal year ends December 31, 2021, and it issues its 2021 financlal statements on March 15, 2022 1. In the inital triat, Dinoco lost a 5117 million lawsuit resulting from a dispute with a supplier. The case is under appeal. Although Dinoco is unable to predict the outcome, it does not expect the case to have a material adverse effect on the company. Assume that the loss is probable. 2. In November 2020, the state of Texas fited suit against Dinoco, seeking civil penalties and injunctive relief for violations of environmental laws regulating hazardous waste. On January 12, 2022, Dinoco reached a settlement with state authorities. Based upon discussions with iegal counsel, it is probable that Dinoco will require $137million to cover the cost of violotions. 3. Oinoco is the plaintf in a $170 millon lawsuit filed against a customer for damages due to lost profits from rejected contracts and for unpold recelvobles. The case is in final appeat, and legal counsel advises that it is probabie Dinoco will prevall and be awarded $85 million. Pequired: Determine the appropriate mears of reporting each situation for the year ended December 31, 2021, and record any necessary entries. (f no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field. Enter your answers in doilars, not millions. For example, $5.5 million should be entered as 5,500,000.) Journal entry worksheet Record the contingent liability if needed. Note: Enter debits before credits