A company manufactures and sells a product. Engineers notified management in December of the current year of a product flaw that poses a potential hazard. An intense investigation indicated that a product recall is virtually certain, estimated to cost the company $1.0 million. The fiscal year ends on December 31. Required: 1. Should this loss contingency be accrued, only disclosed, or neither? 2. What loss, if any, should the company report in its current year income statement? 3. What liability, if any, should the company report in its current year balance sheet? 4. Prepare any journal entry needed. Complete this question by entering your answers in the tabs below. Req 1 to 3 Req 4 1. Should this loss contingency be accrued, only disclosed, or neither? 2. What loss, if any, should the company report in its current year income statement? 3. What liability, if any, should the company report in its current year balance sheet? Note: Enter your answers in millions rounded to 1 decimal place (i.e., 5,500,000 should be entered as 5.5). 1. Loss contingency 2. Loss 3. Liability million million < Req 1 to 3 Req 4 > Show less A company manufactures and sells a product. Engineers notified management in December of the current year of a product flaw that poses a potential hazard. An intense investigation indicated that a product recall is virtually certain, estimated to cost the company $1.0 million. The fiscal year ends on December 31. Required: 1. Should this loss contingency be accrued, only disclosed, or neither? 2. What loss, if any, should the company report in its current year income statement? 3. What liability, if any, should the company report in its current year balance sheet? 4. Prepare any journal entry needed. Complete this question by entering your answers in the tabs below. Req 1 to 3 Req 4 Prepare any journal entry needed. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions rounded to 1 decimal place (i.e., 5,500,000 should be entered as 5.5). View transaction list Journal entry worksheet 1 Record the liability on product recall. Note: Enter debits before credits. Events 1 General Journal Debit Credit Record entry Clear entry View general journal < Req 1 to 3 Req 4