Xeno Corporation purchased supplies from Kimbo Company in 2019. The total invoice was for $20,000, but Xeno

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Xeno Corporation purchased supplies from Kimbo Company in 2019. The total invoice was for $20,000, but Xeno claimed that only one-halfo f the order was received and paid only $10,000 in 2019. Both parties honestly disputed the bill and Xeno refused to pay the contested amount. They went to court and a judgment requiring Xeno to pay an additional $5,000 was issued in 2020. How should Xeno report this expense?

a. $10,000 in 2019 and $5,000 in 2020

b. $15,000 in 2019

c. $15,000 in 2020

d. $20,000 in 2019 and $5,000 of income in 2020

e. None of the above

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CCH Federal Taxation Basic Principles 2020

ISBN: 9780808051787

2020 Edition

Authors: Ephraim P. Smith, Philip J. Harmelink, James R. Hasselback

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