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Business, 18.12.2019 23:31 12345678954
Gomez corporation, a manufacturer of household paints, is preparing annual financial statements at december 31, 2011. because of a recently proven health hazard in one of the paints, the government has clearly indicated its intention of having gomez recall all cans of this paint sold in the last six months. the management of gomez estimates the recall would cost $800,000part a- what accounting recognition if any should be accorded this situation? part b- how would your answer change to part a if 70% of the paint cans were sold before 12/31/2011 and the remainder were sold after 12/31/2011 but before the financial statements were issued on 3/5/2012.part c-how would your answer change to part a if the health hazard was only alleged (but not yet probable) when the 2011 financial statements were published.
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