Chapter 24 - Full Disclosure in Financial Reporting - Review and Practice - Exercises - Page 1447: E24-1

The issuance of common stock of 10,000 shares is a non-recognized subsequent event that does not impact the 2017 financial statements. The extra income taxes of 170,000 (1,270,000-1,100,000) that are payable are a recognized subsequent event that impacts the 2017 income statements. Thus, adjustments ought to be made to reflect them.

The issuance of common stock of 10,000 shares is a non-recognized subsequent event that does not impact the 2017 financial statements. The extra income taxes of 170,000 (1,270,000-1,100,000) that are payable are a recognized subsequent event that impacts the 2017 income statements. Thus, adjustments ought to be made to reflect them.