In May of 2016,Raymond Financial Services Became Involved in a Penalty

Multiple Choice

In May of 2016,Raymond Financial Services became involved in a penalty dispute with the EPA.At December 31,2016,the environmental attorney for Raymond indicated that an unfavorable outcome to the dispute was probable.The additional penalties were estimated to be $770,000 but could be as high as $1,170,000.After the year-end,but before the 2016 financial statements were issued,Raymond accepted an EPA settlement offer of $900,000.Raymond should have reported an accrued liability on its December 31,2016,balance sheet of:

A) $ 770,000.
B) $ 900,000.
C) $ 970,000.
D) $1,170,000.