Froblem 13-8 (Algo) Expected cash flow approach; product recall [LO13-6] The Heinrich Tire Company recalied a tire in its subcompact line in December 2021. Costs associated with the recall were originally thought to approximate $38 million. Now, though, while management feels it is probable the company will incur substantial costs, all discussions indicate that $38 million is an excessive amount. Based on prior recalls in the industry, management has provided the following probablity distribution for the potential los: EV of \$1. PV of \$1. EVA of S1. PVA of \$1. FVAD of S1 and PVAD of S1) (Use oppropriote factor(s) from the tobles provided.) An arrangement with a consortium of distributors requires that all recall costs be settled at the end of 2022 . The risk-free rate of interest is 5% Required: 1. \& 2. By the traditional approach to measuring loss contingencies, what amount would Heinrich record at the end of 2021 for the loss and contingent liabilty? For the remainder of this problem, apply the expected cash flow approach of SFAC No. 7 Estimate Heinrich's liabitity at the end of the 2021 fiscal year. 3. to 5. Prepare the necessary journal enties. Complete this question by entering your answers in the tabs below. By the traditional approach to meawuring loss contingendes, what amount would Heinrich record at the end of 2021 for the loss and contingent liability? For the remainder of this probiem, apply the expected cash flow approach of Ssac Na. 7. Estimate Heinnch's fiability at the end of the 2021 fiscal yoar (knten your answers in whole doiars.) Complete this question by entering your answers in the tabs below. Prepare the necessary journal entries. (If no entry is required for a transaction/event, select "No journal entry required" in the firs) account field. Enter your answers in whole dollars.) Journal entry worksheet Record the contingent liability (and loss). (Apply the expected cash flow approach of SFAC No. 7.) Note: Enter debits before credits. Complete this question by entering your answers in the tabs below. Prepare the necessary joumal entries. (If no entry is required for a transaction/event, select "No journal entry required" in account field. Enter your answers in whole dollars.) Journal entry worksheet Record the accrued interest on the liability at the end of 2022. (Apply the expected cash flow approach of SFAC No. 7.) Note: Enter debits before credits. Complete this question by entering your answers in the tabs below. Prepare the necessary journal entries. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in whole dollars.) Journal entry worksheet Record the payment of the liability at the end of 2022 , assuming the actual cost is $18.8 million. Heinrich records an additional loss if the actual costs are higher or a gain if the costs are lower. (Apply the expected cash flow approach of SFAC NO. 7.) Notei Enter debits before credits