Swift Corp. prepares its financial statements for its fiscal year ending December 31, 2010. Swift estimates that its product warranty liability is $28,000 at December 31, 2010. On February 12, 2011, before the financial statements were issued, Swift received information about a product defect that will require a recall of all units sold in 2010. It is expected the product recall will cost an additional $40,000 in warranty repairs. What should Swift present in its December 31, 2010 financial statements?

a. A footnote disclosure explaining the product recall.

b. A footnote disclosure listing the estimated amount of $40,000 in warranty repairs and an explanation of the recall.

c. An estimated warranty liability of $68,000.

d. No disclosure is necessary.