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Assume that Bagwell took an aggressive tax position that reduced taxable income from $500,000 to $400,000, recorded a Liabilityprojected additional tax for $8,000, and in
Assume that Bagwell took an aggressive tax position that reduced taxable income from $500,000 to $400,000, recorded a Liabilityprojected additional tax for $8,000, and in a later period learns that the entire position was upheld in court. Bagwell pays tax at a rate of 40%. Bagwells journal entry to account for taxes would include a:
a. Debit to tax expense for $92,000
b. Credit to tax benefit of $40,000
c. Debit to tax refund receivable of $8,000
d. Debit to Liabilityprojected additional tax of $8,000
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