The following transaction relate to Tool Companys contingencies. The financial statements are dated December 31, 2023 and were issued on March 31, 2024. a. Tools products carry one year warranty against manufacturer defects. Based on past experience, warranty costs are expected to be 4% of sales. Sales for 2023 were P2,000,000 and actual warranty cost incurred was P30,000. b. In December 2023, an NGO filed suit against Tool seeking penalties for violation of clean air laws. Tools counsel advised that is probable that the entity will lose the case and that the amount of penalty is P2,000,000. Appropriately, the entity recorded the liability. On January 15, 2024, Tools reached a settlement to pay P1,500,000 in penalty. c. Tools is the plaintiff in a P4,000,000 suit filed against a supplier. The attorney advised that it is probable that the entity will win the case and that the award is P2,500,000. On March 15, 2024, the court ruled in favor of Tools and received P2,000,000. d. Tools offered P25 cash rebates on a new model of jigsaw. Customers must mail in a proof of purchase seal from the package plus the cash register receipt to receive the rebate. Experience indicates that 60% if the rebates will be claimed. Tool sold 10,000 jigsaws in 2023 and total rebates paid were P105,000.

What total amount of expense should be recognized in 2023? What total amount of liabilities should be recognized on December 31, 2023?