ACC 422 Expect Success/uophelp.com ACC 422 Expect Success/uophelp.com | Page 65

37. In determining whether to accrue employees’ compensation for future absences, among the conditions that must be met are that the obligation relates to rights that 38. On September 1, year 1, a company borrowed cash and signed a 1-year interest-bearing note on which both the principal and interest are payable on September 1, year 2. How will the note payable and the related interest be classified in the December 31, year 1 balance sheet? 39. Dell Company sells its products in reusable, expensive containers. The customer is charged a deposit for each container delivered and receives a refund for each container returned within two years after the year of delivery. Dell accounts for the containers not returned within the time limit as being retired by sale at the deposit amount. Information for year 3. concerning the containers is as follows: 40. What amount should Dell report as a liability for returnable containers at December 31, year 3? 41. On December 31, year 2, Marsh Company entered into a debt restructuring agreement with Saxe Company, which was experiencing financial difficulties. Marsh restructured a $100,000 note receivable as follows: 42. Marsh does not elect the fair value option for recording this note receivable. In accordance with the agreement, Saxe made payments to Marsh on December 31, year 3 and year 4. How much interest income should Marsh report for the year ended December 31, year 4? 43. If the payment of compensation is probable, the amount can be reasonably estimated, and the obligation relates to rights that vest, employees’ compensation for future absences should be