Ivore into December 1 December 5 Jameson sold 20 go-karts on account. The selling price of each go-kart was $1,100; the cost of goods sold for each was $750. Jameson received notice of a class-action lawsuit being filed against it. The lawsuit claims that Jameson's go-karts have engine defects that appear after the warranty period expires. The plaintiffs want Jameson to replace the defective engines and pay damages for the owners' loss of use. The cost of replacing the engines would be approximately $405,000 (not including any damages). Jameson's attorney believes that it is reasonably possible that Jameson will lose the case, but the attorney cannot provide a dollar estimate of the potential loss amount. December 20 Jameson performed repairs due to product warranty complaints for two go-karts sold earlier in the year. Jameson's cost of the repairs, paid in cash, was $900. December 22 An individual claims that he suffered emotional distress from a high-speed ride on a Jameson Go-Kart and is seeking $490,000 in damages. Jameson's attorney believes the case is frivolous because it does not have any legal merit. December 27 Another customer is suing Jameson for $210,000 because a defect in the customer's Jameson Go-Kart engine started a fire and destroyed the customer's garage. Jameson's attorney believes the customer will probably win the case and receive $210,000. (Use the following account names: Loss from Lawsuit and Accrued Liability from Lawsuit.) December 31 Jameson estimates that the warranty expense is 9% of gross sales. Jameson's aross sales for the period totaled $780.000.