In 2020, Godfrey received a $50,000 sales commission on a long-term contract. But in 2021, the customer filed for bankruptcy and his employer was not able to collect from the customer. Under the bonus agreement, Godfrey was required to repay the employer $20,000 of the bonus. Godfrey was in the 35% marginal tax bracket in 2020 but he is in the 24% marginal tax bracket in 2021. a. Godfrey should not have reported the income in 2020 because of the contingencies.
b. Godfrey can amend his 2020 tax return and reduce his taxable income by $20,000.
c. Godfrey can reduce his 2021 tax liability by 35% × $20,000 = $7,000.
d. Godfrey should deduct the $20,000 paid in 2021 and thus his tax savings will be $4,800.

For each separate case below, follow the 3-step process for adjusting the prepaid asset account at december 31. step 1: determine what the current account balance equals. step 2: determine what the current account balance should equal. step 3: record the december 31 adjusting entry to get from step 1 to step 2. assume no other adjusting entries are made during the year. a. prepaid insurance. the prepaid insurance account has a $4,700 debit balance to start the year. a re- view of insurance policies and payments shows that $900 of unexpired insurance remains at year-end. b. prepaid insurance. the prepaid insurance account has a $5,890 debit balance at the start of the year. a review of insurance policies and payments shows $1,040 of insurance has expired by year-end. c. prepaidrent. onseptember1ofthecurrentyear, thecompanyprepaid$24,000 for 2 years of rentfor facilities being occupied that day. the company debited prepaid rent and credited cash for $24,000.

4. the condition requires that only one of the selected criteria be true for a record to be displayed.

Modern firms increasingly rely on other firms to supply goods and services instead of doing these tasks themselves. this increased level of is leading to increased emphasis on management.