Question
Please make the response detailed and easy to read, thank you 1) During 2015, Flynn Inc. became involved in a tax dispute with the IRS.
Please make the response detailed and easy to read, thank you
1) During 2015, Flynn Inc. became involved in a tax dispute with the IRS. Flynns attorneys have indicated that they believe it is probable that Flynn will lose this dispute. They also believe that Flynn will have to pay the IRS between $225,000 and $350,000. After the 2015 financial statements were issued, the case was settled with the IRS for $300,000.
a) Explain the proper accounting treatment for this for the year ended December 31, 2015. Write in complete sentences.
b) If the above event must be recorded, prepare the proper general journal entry as of 12/31/2015. In your explanation, explain the reason for any amount you record.
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