76. How would the amortization of discount on bonds payable affect each of the following?
77. What type of bonds in a particular bond issuance will not all mature on the same date?
78. During year 2, a former employee of Dane Co. began a suit against Dane for wrongful termination in November year 1. After considering all of the facts, Dane’ s legal counsel believes that the former employee will prevail and will probably receive damages of between $ 1,000,000 and $ 1,500,000, with $ 1,300,000 being the most likely amount. Dane’ s financial statements for the year ended December 31, year 1, will not be issued until February year 2. In its December 31, year 1 balance sheet, what amount should Dane report as a liability with respect to the suit?
79. Fulton Cereal Company inaugurated a new sales promotional program. For every 10 cereal box tops returned to the company, customers receive an attractive prize. Fulton estimates that only 30 % of the cereal box tops reaching the consumer market will be redeemed. Additional information is as follows:
80. At the end of its year, Fulton recognized a liability equal to the estimated cost of potential prizes outstanding. What is the amount of this estimated liability?
81. Baker Co. sells consumer products that are packaged in boxes. Baker offered an unbreakable glass in exchange for two box tops and $ 1 as a promotion during the current year. The cost of the glass was $ 2.00. Baker estimated at the end of the year that it would be probable that 50 % of the box tops will be redeemed. Baker sold 100,000 boxes of the product during the current year and 40,000 box tops were redeemed during the year for the glasses. What amount should Baker accrue as an estimated liability at the end of the current year, related to the redemption of box tops?