Top Sound International designs and sells high$-$end stereo equipment for auto and home use. Engineers notified management in December $2024$ 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 $$3\mathrm{.}3$ million. The fiscal year ends of December $31.$

Required:

$1$ Should this contingent liability be reported, disclosed in a note only, or neither?

$2$ What loss, if any, should Top Sount report in its $2024$ income statement?

$3$ What liability, if any should Top Sount report in its $2024$ income statement?

$4$ What entry, if any, should be recorded?