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Madrasah Corporation issued its financial statements for the year ended December 31, 2008, on March 10, 2009. The following events took place early in 2009.
(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 2008 should be $1,270,000. At December 31, 2008, income taxes payable were recorded at $1,100,000.
Instructions
Discuss how the preceding post-balance-sheet events should be reflected in the 2008 financial statements.
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