Can someone help me with an executive summary on the following?

it has to be less than a page. Thank you!

Question 1. As of December 31, 2011, what amount, if any, of sales taxes due should be recognized in eVade's financial statements? Which alternative is a more appropriate solution?

According to FASB regulations regarding Accounting for Uncertainty in Income Taxes, Paragraph B18, every business is accountable in "compliance, self-assessment, and self-reporting." Depending on the type of business, a company needs to understand the tax rates imposed by IRS. To solve the eVade case, it is essential to evaluate and consider accounting standards regarding Loss Contingencies 450-20-25-2. A loss contingency arises from past events, which could potentially create a liability. The way this obligation is recognized on financial statements depends on the classification of the loss contingency. Contingent liability is categorized as probable, reasonably possible, or remote. Regularly, the probability of loss indicates the reporting approach. To record an obligation in the current period, the even must be probable, more than 50% likely to happen, and the amount of loss can be reasonably estimated.

In our example, due to State X's recent court ruling to introduce the economic nexus, "eVade" faces a potential sale nexus tax accountable to State X. It is stated that "eVade" does not have a brick-and-mortar store presence in State X. Moreover, the organization never recorded any tax sales or never reported interest and penalties expenses from 2011, when the company began its operations in this state. State X's total amount of obligations, "eVade," estimated to be $50 million in sales tax, $6 million in interest, and $4 million in penalties for five years operating in State X. It is important to note that the company identifies the risk of detention as not to be probable. Therefore, according to FASB 450-20-25-2, 450-20-25-4, and 450-20-25-5, the chance of validating the event will occur is less than probable and more than remote. It can be concluded that there is no need to record anything in the Balance Sheet even though "eVade" made an exact estimate. Nevertheless, the firm must disclose suitable footnotes concerning this loss contingency and the amount of $60 million, including the $50 million in sale tax plus $4 million in penalties, plus $6 in interest.

Question 2. What effect, if any, does eVade's decision to participate in the tax amnesty program have on the amount recognized as of March 31, 2012? Which alternative is a more appropriate solution?

As the situation displays, State X decides on offering a tax amnesty program to anyone having a tax liability. Usually, the states would enact a tax amnesty program to collect the problematic revenue. On the other hand, it is an excellent opportunity for organizations to pay fewer taxes on previous tax liability and avoid penalties.

On March 15, 2012, "eVade" decided to participate in this tax amnesty, which will allow paying by 50% less in tax fees and avoiding penalties and interests. Hence, following 250-10-50-9 and 250-10-50-11 standards, the company must recognize the amount of liability of $25 million in the financial statements on March 31, 2012. Based on previous standards, this loss will be reflected in the financial statements for 2012, but it will not be reflected in the financial statements in 2011.

Journal entry for March 15, 2012:

Accounts Payable 25 million

Sales Tax liability 25 million

Question 3. What amounts should be recognized in the financial statements for the $25 million payment on June 15, 2012?

It is crucial to address the revenue recognition principle 606-10-55-49, which refers to recognizing the liability of "eVade" on the financial statement due to being noncompliant to State X tax laws.

As mentioned in question 2, the financial statements for 2011 will remain unchanged, and the $25 million payment will be recorded as an entry to the 2012 financial statement. If the amount is recognized as a liability in March, this payment will extinguish this liability and will not have any additional income statement entry.

Journal entry for June 15, 2012:

Sales Tax liability 25 million

Cash 25 million