these cash flows, discounted at Malrom’ s market interest rate, is $ 4,800,000. At what amount should the patent be carried on the December 31, 2007 balance sheet? 40) Goodwill 41) 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 42) The reason goodwill is sometimes referred to as a master valuation account is because 43) Which of the following items is a current liability? 44) Which of the following statements is false? 45) Stock dividends distributable should be classified on the 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: Year Hourly Wages Vacation Days Earned by Each Employee Vacation Dayse Used by Each Employee 2006 $ 28.50 10 0 2007 $ 27.00 10 8 2008 $ 28.50 10 10 What is the amount of expense relative to compensated absences that should be reported on Simson’ s income statement for 2006? 47) A company buys an oil rig for $ 1,000,000 on January 1, 2007. The life of the rig is 10 years and the expected cost to dismantle the rig at the end of 10 years is $ 200,000( present value at 10 % is $ 77,110). 10 % is an appropriate interest rate for this company. What expense should be recorded for 2007 as a result of these events? 48) 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