3. A tax lawsuit related
SWFT Essntl Tax Individ/Bus Entities 2020
23rd Edition
ISBN:9780357391266
Author:Nellen
Publisher:Nellen
Chapter3: Taxes On The Financial Statements
Section: Chapter Questions
Problem 14P
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Transcribed Image Text:3. A tax lawsuit related to the year 2021 was settled late in 2023. It was determined that the
company owed an additional $93,000 in taxes related to 2021. The company did not record a
liability in 2019 or 2020 because the possibility of loss was considered remote and charged the
$93,000 to retained earnings in 2023 as a correction of a prior year's error. (It is not an Income
Tax Expense).
3.
Retained Earnings
Show Transcribed Text
C
U
93000
93000
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