5 . ( TCO C ) During 2011 , Bond Company purchased the net assets of May Corporation for $ 1,000,000 . On the date of the transaction , May had $ 300,000 of liabilities . The fair value of May ' s assets when acquired were as follows : 6 . ( TCO D ) Which of the following is a condition for accruing a liability for the cost of compensation for future absences ? ( Points : 5 ) 7 . ( TCO D ) Which of the following taxes does not represent a payroll deduction a company may incur ? ( Points : 5 ) 8 . ( TCO D ) Assume that a manufacturing corporation has ( 1 ) good quality control , ( 2 ) a one-year operating cycle , ( 3 ) a relatively stable pattern of annual sales , and ( 4 ) a continuing policy of guaranteeing new products against defects for three years that has resulted in material but rather stable warranty repair and replacement costs . Any liability for the warranty ( Points : 5 ) 9 . ( TCO D ) Jenkins Corporation has $ 2,500,000 of short-term debt it expects to retire with proceeds from the sale of 75,000 shares of common stock . If the stock is sold for $ 20 per share subsequent to the balance sheet date , but before the balance sheet is issued , what amount of short-term debt could be excluded from current liabilities ? ( Points : 5 ) 10 . ( TCO D ) Tender Foot Inc . is involved in litigation regarding a faulty product sold in a prior year . The company has consulted with its attorney and determined that it is possible that they may lose the case . The attorneys estimated that there is a 40 % chance of losing . If this is the case , their attorney estimated that the amount of any payment would be $ 500,000 . What is the required journal entry as a result of this litigation ? ( Points : 5 ) 11 . ( TCO D ) If bonds are initially sold at a discount and the straightline method of amortization is used , interest expense in the earlier years will ( Points : 5 ) 12 . ( TCO D ) When the interest payment dates of a bond are May 1 and November 1 , and a bond issue is sold on June 1 , the amount of cash received by the issuer will be ( Points : 5 ) 13 . ( TCO D ) Feller Company issues $ 20,000,000 of ten-year , 9 % bonds on March 1 , 2010 at 97 plus accrued interest . The bonds are dated January 1 , 2010 , and pay interest on June 30 and December 31 . What is the total cash received on the issue date ? ( Points : 5 )