2) Kasten Inc. provides paid vacations to its employees. At December 31, 2014, 36 employees have each earned 2 weeks of vacation time. The employees’ average salary is $ 513 per week. Prepare Kasten’ s December 31, 2014, adjusting entry.( If no entry is required, select " No Entry " for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)
3) Buchanan Company recently was sued by a competitor for patent infringement. Attorneys have determined that it is probable that Buchanan will lose the case and that a reasonable estimate of damages to be paid by Buchanan is $ 317,310. In light of this case, Buchanan is considering establishing a $ 115,690 self-insurance allowance.
4) Buchanan should record a litigation accrual on the patent case, since the amount is both estimable and probable. This entry will reduce income by $ 317,310 and Buchanan will report a litigation liability of $ 317,310. The $ 115,690 self-insurance allowance has no impact on income or liabilities.