Madrasah Corporation issued its financial statements for the year ended December 31, 2020, on March 10, 2021.

Question:

Madrasah Corporation issued its financial statements for the year ended December 31, 2020, on March 10, 2021. The following events took place early in 2021.

a. On January 10, 10,000 shares of $5 par value common stock were issued at $66 per share.

b. On March 1, Madrasah determined after negotiations with the Internal Revenue Service that income taxes payable for 2020 should be $1,270,000. At December 31, 2020, income taxes payable were recorded at $1,100,000.

Instructions

Discuss how the preceding post-balance-sheet events should be reflected in the 2020 financial statements.

Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial... Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on... Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may... Par Value
Par value is the face value of a bond. Par value is important for a bond or fixed-income instrument because it determines its maturity value as well as the dollar value of coupon payments. The market price of a bond may be above or below par,...

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