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During 2020, ABC Company became involved in a tax dispute with the BIR. At December 31, 2020, ABC's tax advisor believed that an unfavourable outcome was probable and a reasonable estimate of additional taxes was P5,250,000. Before the 2020 financial statements were issued, ABC received and accepted a BIR settlement of P5,500,000. What amount of accrued liability would ABC have reported on its December 31, 2020 balance sheet?

During 2020, ABC Company became involved in a tax dispute with the BIR. At December 31, 2020, ABC's tax advisor believed that an unfavourable outcome was probable and a reasonable estimate of additional taxes was P5,250,000. Before the 2020 financial statements were issued, ABC received and accepted a BIR settlement of P5,500,000. What amount of accrued liability would ABC have reported on its December 31, 2020 balance sheet?

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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During 2020, ABC Company became involved in a tax dispute with the BIR. At December 31, 2020, ABC's tax advisor believed that an unfavourable outcome was probable and a reasonable estimate of additional taxes was P5,250,000. Before the 2020 financial statements were issued, ABC received and accepted a BIR settlement of P5,500,000. What amount of accrued liability would ABC have reported on its December 31, 2020 balance sheet? To input answers, kindly follow the sample format below(no peso sign, with comma, no space): ex. 100,000
Transcribed Image Text:During 2020, ABC Company became involved in a tax dispute with the BIR. At December 31, 2020, ABC's tax advisor believed that an unfavourable outcome was probable and a reasonable estimate of additional taxes was P5,250,000. Before the 2020 financial statements were issued, ABC received and accepted a BIR settlement of P5,500,000. What amount of accrued liability would ABC have reported on its December 31, 2020 balance sheet? To input answers, kindly follow the sample format below(no peso sign, with comma, no space): ex. 100,000
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