Sound Audio manufactures and sells audio equipment for automobiles. Engineers notified management in December 2018 of a circuit flaw in an amplifier that poses a potential fire hazard. An intense investigation indicated that a product recall is virtually certain, estimated to cost the company $2 million. The fiscal year ends on December 31. Required: 1. Should this loss contingency be accrued & disclosed, only disclosed, or neither? 2. What loss, if any, should Sound Audio report in its 2018 income statement? 3. What liability, if any, should Sound Audio report in its 2018 balance sheet? 4. Prepare any journal entry needed. Complete this question by entering your answers in the tabs below. Req 1 to 3 Reg 4 Should this loss contingency be accrued & disclosed, only disclosed, or neither? What loss and liability, if any, should Sound Audio report in its 2018 income statement and balance sheet respectively? (Enter your answer in millions (i.e., 10,000,000 should be entered as 10).) 1. Loss contingency Accrued & disclosed 2 Loss 3. Liability Sound Audio manufactures and sells audio equipment for automobiles, engineers notified management in December 2018 of a circuit flaw in an amplifier that poses a potential fire hazard. An intense investigation indicated that a product recall is virtually certain, estimated to cost the company $2 million. The fiscal year ends on December 31. Required: 1. Should this loss contingency be accrued & disclosed, only disclosed, or neither? 2. What loss, if any, should Sound Audio report in its 2018 income statement? 3. What liability, if any, should Sound Audio report in its 2018 balance sheet? 4. Prepare any journal entry needed. Complete this question by entering your answers in the tabs below. Req 1 to 3 Ri94 Prepare any journal entry needed. (If no entry is required for a transaction/event, select "No journal entry required in the first account held. Enter your answers in millions (ie., 10,000,000 should be entered as 10).) View transaction list View journal entry worksheet No Event Debit Credit General Journal Loss-product recall Liability product recall