of the bonus. If income before income tax and bonus is $ 640,000 and the tax rate is 40 %, the amount of the bonus would be
92. In year 1, May Corp. acquired land by paying $ 75,000 down and signing a note with a maturity value of $ 1,000,000. On the note’ s due date, December 31, year 6, May owed $ 40,000 of accrued interest and $ 1,000,000 principal on the note. May was in financial difficulty and was unable to make any payments. May and the bank agreed to amend the note as follows:
93. May does not elect the fair value option for reporting its financial liabilities. As a result of the troubled debt restructuring, May should report a gain, before taxes, in its year 6 income statement of
94. Bloy Company pays all salaried employees on a biweekly basis. Overtime pay, however, is paid in the next biweekly period. Bloy accrues salaries expense only at its December 31 year-end. Data relating to salaries earned in December year 1 are as follows: 95. Assuming a 5-day work week, Bloy should record a liability at December 31, year 1, for accrued salaries of
96. On March 1, year 1, Harbour Corporation issued 10 % debentures dated January 1, year 1, in the face amount of $ 1,000,000, with interest payable on January 1 and July 1. The debentures were sold at par and accrued interest. How much should Harbour debit to cash on March 1, year 1?
97. On December 1, year 1, Paxton Co. had a note payable due on August 1, year 2. On January 20, year 2, Paxton signed a financing agreement to borrow the balance of the note payable from a lending institution to refinance the note. The agreement does not expire within one year, and no violation of any provision in the financing agreement exists. On February 1, year 2, Paxton was informed by its financial advisor that the lender is not expected to be financially capable of honoring the agreement. Paxton’ s financial statements were issued on