16 . In May of 2019 , Eric Clapton Financial Services became involved in a tax dispute with the IRS. At December 31 , 2019 , the attorney for Clapton indicated an unfavorable outcome to the dispute was probable . The additional taxes were estimated to be $770 , 000 but could be as high as $ 1 , 170 , 000 . After the year-end , but before the 2019 financial statements were issued , Clapton accepted an IR.S' settlement offer of $900 , 000 . The accrued liability Clapton should report on its December 31 , 2019 , balance sheet is :" A) $7 70, 000 B ) $900,000 (* ) $970, 000 $1 , 170.000