"Fore Farms reported a pretax operating loss of $276" million for financial reporting purposes in 2021. Contributing to the loss were (a) a penalty of $4 million assessed by the Environmental Protection Agency for violation of a federal law and paid in 2021 and (b) an estimated loss of $30 million from accruing a loss contingency. The loss will be tax deductible when paid in 2022.
Prepare the journal entry to record income taxes in 2022 assuming pretax accounting income is $224 million.

Gerda, a real estate agent, is selling a moderately priced house in a subdivision. she knows from her uncle that the factory being built half a mile from the subdivision will be manufacturing dog food, using a process that creates a very strong odor that permeates the surrounding neighborhood. a buyer, who is unaware of the type of factory under construction, makes an offer on one of the houses gerda is selling, and within a short time, the deal goes through. what does this scenario best illustrate?