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Dobbin Corporation, a manufacturer of house- hold paints, is preparing annual financial statements at year end. Because of a recently proven health hazard in one

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Dobbin Corporation, a manufacturer of house- hold paints, is preparing annual financial statements at year end. Because of a recently proven health hazard in one of its paints, the govemment required Dobbin to recall all cans of this paint sold in the last 6 months. The management of Dobbin estimates that this recall cost $1,000,000. What accounting recognition, if any, should be accorded this situation? a. no recognition b. footnote disclosure c. operating expense of $1,000,000 d. liability of $1,000,000

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