Based on a more likely than not (MLTN) basis:

• Co. should only have claimed federal R&D credit of $8,000
• Co. identified a bonus accrual at the end of YrX1 of $20,000 that should not have been deducted for tax purposes. This bonus accrual was new this year.
• For federal and state purposes, each jurisdiction assesses a 10% penalty on underpayment of taxes, and simple interest of 5% per year.

g) What are the amounts of the unrecognized tax benefits?

h) What are the penalties and interest resulting from these UTBs at 12/31/YrX1?

i) What are the journal entries to book the effects of the unrecognized tax benefits?

j) What is the total provision for income tax on a MLTN basis?