The State of Alabama filed suit against Edwards Chemical Company for violations of water pollution laws in $2022.$ During$2022,$ the company accrued a $ $330$ comma $000$ loss for litigation. At the end of$2023,$ Edwards was able to settle with the State for $ $250$ comma $000.$ What entry should Edwards make when it pays the State in$$ December, $2023?$ The State of Alabama filed suit against Edwards Chemical Company for violations of water

pollution laws in $2022.$ During $2022,$ the company accrued a $$330,000$ loss for litigation. At

the end of $2023,$ Edwards was able to settle with the State for $$250,000.$ What entry should

Edwards make when it pays the State in December, $2023?$

A$.$ Litigation Liability

Retained Earnings

Cash

B$.$ Litigation Liability

Gain on Litigation

Cash

C$.$ Litigation Liability

Recovery of a Loss

Cash

$330,000$

$330,000$

$80,000$

$250,000$

$330,000$

$80,000$

$250,000$

D$.$ Litigation Liability

$250,000$

Cash

$250,000$