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Question - During October 2016 a number of defects were being reported during one particular manufacturing run which occured during September 2016.
On October 26, 2016 it was decided to issue a recall.
1. In October $50,000 of refunds were issued (customers who complained)
2. Sale price of the entire production run was $700,000 (including refunds which have been already issued)
3. Unknown additional costs relating to recall estimated at $100,000. It is not determinable what further costs there will be but they may be up to a further $200,000
A. Write and explain all possible accounting journal entries.
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