Problem N4 Barlowe, Inc. is involved with several situations that possib Each is described below. Barlow's fiscal year ends December 31, and the issued on March 1, 2019 fuations that possibly involve contingencies. cember 31, and the 2018 financial statements are Required: 1. Determine the appropriate means of reporting cach Explain your reasoning 2. Prepare any necessary journal entries g each situation (Recognition Disclosure, or None) 1. At March 1, 2019, the EPA is in the process of Barlowe's facilities, but has not proposed a deficiency assess assessment is reasonably possible, and if an assessmen to $8 million is reasonably possible. in the process of investigating possible chemical leaks at two of onably possible, and if anasessment is made an unfavorable settlement of op proposed a deficiency assessment Management feels an 2. Barlowe is the plaintiff in a $3 million lawsuit filed against Fare Corp 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 that Barlowe will prevail and be awarded $25 million 3. In July 2015, the State of Arkansas filed suit against Barlowe, seeking civil penalties and injunctive relief for violations of environmental laws regulating hazardous waste. On February 12, 2019, Barlowe reached a settlement with state authorities. Based upon discussions with legal counsel, the Company feels it is probable that S13 million will be required to cover the cost of violations. Barlowe believes that the ultimate settlement of this claim will not have a material adverse effect on the company. 4. Barlowe is involved in a lawsuit resulting from a dispute with a customer. On January 5, 2019, judgment was rendered against Barlowe in the amount of S16 million plus interest, a total of 18 million Barlowe plans to appeal the judgment and is unable to predict its outcome though it is not expected to have a material adverse effect on the company