Reg [The following information applies to the questions displayed below.) Top Sound International designs and sells high-end stereo equipment for auto and home use, Engineers notified management in December 2021 of a circuit flaw in an amplifier that poses a potential fire hazard. Further investigation indicates that a product recall is probable, estimated to cost the company $4 million. The fiscal year ends on December 31. 2. What loss, if any, should Top Sound report in its 202 Uncome statement? (Enter your answer in doars, not in millions (i.e. 5.5 should be entered as 5,500,000).) 0 Required information The following information applies to the questions displayed below! Top Sound International designs and sells high end stereo equipment for auto and home use, Engineers notified management in December 2021 of a clicuit flaw in an amplifier that poses a potential fire hazard. Further investigation indicates that a product recallis probable, estimated to cost the company $1 million. The fiscal year ends on December 31, 3. What Hability, if any, should Top Sound repon in its 2021 balance sheet? (Enter your onswer in dollors, not in millions (1.0.5.5 should be entered as 5,500,000).) Liability to be reported Top Sound Internatinal designs and sells high-end stereo equipment for auto and home'use. Engineers notified management in December 2021 of a circuit flaw in an amplifier that poses a potential fire hazard. Further investigation indicates that a product recall is probable estimated to cost the company $4 million. The fiscal year ends on December 31. 4. What entry. If any should be recorded? (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field. Enter your answers in dollars, not in millions (i.e. 5.5 should be entered as 5,500,000).) View transaction list Journal entry worksheet nes 1 Record the contingent liability if needed Norter des before credits Transaction General Journal Debit Credit Computer Wholesalers restores and resells notebook computers. It originally acquires the notebook computers from corporations upgrading their computer systems, and it backs each notebook it sells with a 90-day warranty against defects. Based on previous experience, Computer Wholesalers expects warranty costs to be approximately 6% of sales. Sales for the month of December are $600,000. Actual warranty expenditures in January of the following year were $13,000 4. What is the balance in the Warranty Liability account after the entries in Part 2 and 3? Warranty Liability
