The commonwealth of virginia filed suit in october 2016, against northern timber corporation seeking civil penalties and injunctive relief for violations of environmental laws regulating forest conservation. when the financial statements were issued in 2017, northern had not reached a settlement with state authorities, but legal counsel advised northern timber that it was probable the ultimate settlement would be $1,000,000 in penalties. the following entry was recorded: loss—litigation 1,000,000 liability—litigation 1,000,000 late in 2018, a settlement was reached with state authorities to pay a total of $600,000 to cover the cost of violations.

prepare any journal entries related to the change. (if no entry is required for a transaction/event, select "no journal entry required" in the first account field.)

Baskin promotions, inc. sells t-shirts decorated for a variety of concert performers. the company has developed the following budget for the coming year based on a sales forecast of 80,000 t-shirts: sales $ 1,400,000 cost of goods sold 820,000 gross profit 580,000 operating expenses ($100,000 is fixed) 418,400 operating income 161,600 income taxes (30% of operating income) 48,480 net income $ 113,120 cost of goods sold and variable operating expenses vary directly with sales, and the income tax rate is 30% at all levels of operating income. if the concert season is slow due to poor weather, baskin estimates that sales could fall to as low as 60,000 t-shirts. assume baskin actually achieves the 60,000 unit sales level, and that net income actually earned at this level was $70,000. a performance report would indicate that net income was: