107. After recording the year 2 estimated warranty expense, the
warranty liability account would show a December 31, year 2 balance
of
108. A 15-year bond was issued in year 1 at a discount. The fair value
option was not elected to value financial liabilities. During year 10 a
10-year bond was issued at face amount with the proceeds used to
retire the 15-year bond at its face amount. The net effect of the year
10 bond transactions was to increase long-term liabilities by the
excess of the 10-year bond’s face amount over the 15-year bonds.
109. After three profitable years, Dodd Co. decided to offer a bonus to
its branch manager, Cone, of 25% of income over $100,000 earned by
his branch. For year 1, income for Cone’s branch was $160,000
before income taxes and Cone’s bonus. Cone’s bonus is computed on
income in excess of $100,000 after deducting the bonus, but before
deducting taxes. What is Cone’s bonus for the year year 1?
110. Wyatt Co. has a probable loss that can only be reasonably
estimated within a range of outcomes. No single amount within the
range is a better estimate than any other amount. The loss accrual
should be
111. A company issued 10-year term bonds at a discount in year 1.
Bond issue costs were incurred at that time. The company uses the
effective interest method to amortize bond issue costs. Reporting the
bond issue costs as a deferred charge would result in
112. On June 30, year 1, Dean Company had outstanding 8%,
$1,000,000 face value, 15-year bonds maturing on June 30, year 11.
Interest is payable on June 30 and December 31. The unamortized
balances on June 30, year 1, in the bond discount and deferred bond
issue costs accounts were $45,000 and $15,000, respectively. Dean
reacquired all of these bonds at 93 on June 30, year 1, and retired
them. How much gain should Dean report on this early
extinguishment of debt?