The reason goodwill is sometimes referred to as a master valuation
account is because 42) Easton Company and Lofton Company were
combined in a purchase transaction. Easton was able to acquire Lofton at
a bargain price. The sum of the market or appraised values of
identifiable assets acquired less the fair value of liabilities assumed
exceeded the cost to 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 right-of-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