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Green Co. was preparing its year-end financial statements. Green had a pending...

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Accounting

Green Co. was preparing its year-end financial statements. Green had a pending lawsuit against a competitor for $5,000,000 in damages. Greens attorneys indicate that obtaining a favorable judgment was probable and the amount of damages is reasonably estimated. Green incurred $100,000 in legal fees. The income tax rate was 30%. What amount, if any, should Green recognize as a contingency gain in its financial statements?
A. $0
B. $4,900,000
C. $3,500,000
D. $3,430,000

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