amend the note as follows:
93. May does not elect the fair value option for reporting its financial
liabilities. As a result of the troubled debt restructuring, May should
report a gain, before taxes, in its year 6 income statement of
94. Bloy Company pays all salaried employees on a biweekly basis.
Overtime pay, however, is paid in the next biweekly period. Bloy
accrues salaries expense only at its December 31 year-end. Data
relating to salaries earned in December year 1 are as follows:
95. Assuming a 5-day work week, Bloy should record a liability at
December 31, year 1, for accrued salaries of
96. On March 1, year 1, Harbour Corporation issued 10% debentures
dated January 1, year 1, in the face amount of $1,000,000, with
interest payable on January 1 and July 1. The debentures were sold at
par and accrued interest. How much should Harbour debit to cash on
March 1, year 1?
97. On December 1, year 1, Paxton Co. had a note payable due on
August 1, year 2. On January 20, year 2, Paxton signed a financing
agreement to borrow the balance of the note payable from a lending
institution to refinance the note. The agreement does not expire within
one year, and no violation of any provision in the financing agreement
exists. On February 1, year 2, Paxton was informed by its financial
advisor that the lender is not expected to be financially capable of
honoring the agreement. Paxton’s financial statements were issued on
March 31, year 2. How should Paxton classify the note on its balance
sheet at December 31, year 1?
98. On November 1, year 1, Beni Corp. was awarded a judgment of
$1,500,000 in connection with a lawsuit. The decision is being
appealed by the defendant, and it is expected that the appeal process
will be completed by the end of year 2. Beni’s attorney feels that it is
highly probable that an award will be upheld on appeal, but that the
judgment may be reduced by an estimated 40%. In addition to