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Item 11

Nyguen Electronics is a leading manufacturer of digital camera equipment. Assume the following transactions occur during the year ended December 31, 2024.

Accounts receivable were $28.8 million (all credit) at the end of 2024. Although no specific customer accounts have been shown to be uncollectible, the company estimates that 1% of accounts receivable will eventually prove uncollectible.

Nyguen Electronics is the plaintiff in a $4.8 million lawsuit filed against a supplier. The suit is in final appeal, and attorneys advise it is virtually certain that Nyguen Electronics will win and be awarded $3.3 million.

In November 2024, Nyguen Electronics became aware of a design flaw in one of its digital camera models. A product recall appears probable and would likely cost the company $580,000.

Nyguen Electronics is the defendant in a patent infringement lawsuit brought by a competitor. It appears reasonably likely Nyguen Electronics will lose the case, and potential losses are estimated to be in the range of $2.3 to $3.3 million.

Required:

Determine the appropriate way Nyguen Electronics would report the contingencies. Record any amounts as a result of each of these contingencies if required. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field. Enter your answers in dollars, not in millions. For example, $5.5 million should be entered as 5,500,000.)