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WBM Motorworks is a manufacturer of high-end touring and off-road motorcycles. On November 30, the company was sued by a customer who was injured when the front shock absorber on the WBM Series 3 motorcycle was cracked during use. The company conducted a preliminary investigation into the matter during December and found evidence of a manufacturing defect in the shock absorber. Where it is uncertain whether the manufacturing defect is the source of the product failure, the company has voluntarily recalled the front shock absorbers on the Series 3 motorcycles. The company is uncertain about how the lawsuit will be resolved. Similar lawsuits against other manufacturers have been settled for approximately $2,000,000.
Write a brief memo (150 -200 words) to the president of WBM Motoworks, U.D. Mach III, discussing how the lawsuit might be reported in the financial statement. Hint: the content related to contingencies reporting is in the textbook, chapter 10. Two reference weblinks in APA style are required, and at least comment on two classmates’ work.


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