During Year 1, Haft Co. became involved in a tax dispute with the IRS. At December 31, Year 1, Haft's tax advisor believed that an unfavorable outcome was probable. A reasonable estimate of additional taxes was $200,000 but could be as much as $300,000. After the Year 1 financial statements were issued, Haft received and accepted an IRS settlement offer of $275,000. What amount of accrued liability should Haft have reported in its December 31, Year 1 balance sheet? O A. $200,000 O B. $250,000 O C. $275,000 $300,000 O D