Sound Audio manufactures and sellsaudio equipmentfor automobiles. Engineers noti

Sound Audio manufactures and sellsaudio equipmentfor automobiles. Engineers notified management in December 2013 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 or neither? Explain.2. What loss if any should Sound Audio report in its 2013income statement?3. Whatliability if any should Sound Audio report in its 2013balance sheet?4. Prepare anyjournal entryneeded.