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Business, 02.11.2020 16:50 madisonenglishp2qkow
Overton Corporation, a manufacturer of household paints, is preparing annual financial statements at December 31, 2019. Because of a recently proven health hazard in one of its paints, the government has ordered Overton to recall all cans of this paint sold in the last six months. The management of Overton believes it is probable it would lose if it contested the recall and estimates that this recall would cost $800,000. What accounting recognition, if any, should be accorded this situation, assuming the amount would be considered material to Overton of the company had to make the recall
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