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Top Sound International designs and sells high - end stereo equipment for auto and home use. Engineers notified management in December 2 0 2 4
Top Sound International designs and sells highend stereo equipment for auto and home use. Engineers notified management in December 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 $ million. The fiscal year ends on December
Required:
Should this contingent liability be reported, disclosed in a note only, or neither?
What loss, if any, should Top Sound report in its income statement?
What liability, if any, should Top Sound report in its balance sheet?
What entry, if any, should be recorded?
Complete this question by entering your answers in the tabs below.
Required Required
What entry, if any, should be recorded? If no entry is required for a particular transactionevent select No Journal Entry Required" in the first account field. Enter your answers in dollars, not in millions ie million should be entered as
Journal entry worksheet
Record the contingent liability if needed.
Note: Enter debits before credits.
tableTransactionGeneral Journal,Debit,Credit
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