goodwill) had a fair value of $1,450,000 at that time. What amount of
loss on impairment of goodwill should Twilight record in 2008? 39)
Fleming Corporation acquired Out-of-Sight Products on January 1, 2008
for $4,000,000, and recorded goodwill of $750,000 as a result of that
purchase. At December 31, 2008, the Out-of-Sight Products Division
had a fair value of $3,400,000. The net identifiable assets of the Division
(excluding goodwill) had a fair value of $2,900,000 at that time. What
amount of loss on impairment of goodwill should Fleming record in
2008? 40) When a patent is amortized, the credit is usually made to 41)
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