Easton. After revaluing noncurrent assets to zero, there was still some
"negative goodwill." Proper accounting treatment by Easton is to
report the amount as
43) Stock dividends distributable should be classified on the
44) Which of the following statements is false?
45) Which of the following items is a current liability?
46) Simson Company has 35 employees who work 8-hour days and
are paid hourly. On January 1, 2006 the company began a program of
granting its employees 10 days of paid vacation each year. Vacation
days earned in 2006 may first be taken on January 1, 2007.
Information relative to these employees is as follows:
What is the amount of expense relative to compensated absences that
should be reported on Simson’s income statement for 2006?
47) A company offers a cash rebate of $1 on each $4 package of
batteries sold during 2007. Historically, 10% of customers mail in the
rebate form. During 2007, 6,000,000 packages of batteries are sold,
and 210,000 $1 rebates are mailed to customers. What is the rebate
expense and liability, respectively, shown on the 2007 financial
statements dated December 31?
48) A company offers a cash rebate of $1 on each $4 package of light
bulbs sold during 2007. Historically, 10% of customers mail in the
rebate form. During 2007, 4,000,000 packages of light bulbs are sold,
and 140,000 $1 rebates are mailed to customers. What is the rebate
expense and liability, respectively, shown on the 2007 financial
statements dated December 31?
49) A contingency can be accrued when
50) Mark Ward is a farmer who owns land which borders on the rightof-way of the Northern Railroad. On August 10, 2007, due to the
admitted negligence of the Railroad, hay on the farm was set on fire
and burned. Ward had had a dispute with the Railroad for several
years concerning the ownership of a small parcel of land. The
representative of the Railroad has offered to assign any rights which
the Railroad may have in the land to Ward in exchange for a release
of his right to reimbursement for the loss he has sustained from the
fire. Ward appears inclined to accept the Railroad's offer. The
Railroad's 2007 financial statements should include the following
related to the incident: